By Sheila Mckenzie-
The Department Of Education has published fresh guidance reminding Academy trusts to ensure salaries match an individual’s responsibilities and the performance of schools under their control.
Under the stringent new guidance on setting pay for top executives, the British government is insisting that trusts ensure pay demonstrates value for money by giving board members clear advice that includes the consideration that academic performance and outcomes of the trust are reflected in the incomes of their top executives. This includes inquiring whether the trust is providing a high standard of education and whether expectations are being met.
Academy trusts are required to publish high salaries in their accounts and so provide a higher level of public scrutiny than local authority schools that are not required to publish individual statutory accounts.
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Building on the efforts of Academies Minister Lord Agnew to curb excessive pay, the Department for Education today set out the key factors academy trusts should consider when setting and reviewing executive salaries. A total of 213 academy trusts were asked to justify high salaries in the last 18 months as part of a Government clampdown to ensure that pay is proportionate, reasonable, and in-line with the overwhelming majority of trusts that comply with rules on salaries set out in government guidance.
A number of trusts have revised down executive salaries, 51 in total, as that government clamps down on excess pay of greedy bosses. The published guidance also expects the financial performance of the trust to be taken into account, using data to measure the trust’s financial position and future projection, and not being afraid to make downward salary adjustments where appropriate.
Also included is the experience and responsibilities of the individual – including what extra value the expertise will bring to the role, and the use of performance management, salary increases and incentives. setting out that pay increases should not be awarded automatically and that boards should pay extra attention to bonuses paid using funds intended for education.
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Academy trusts are required to publish high salaries in their accounts and so provide a higher level of public scrutiny than local authority schools that are not required to publish individual statutory accounts.
Academies Minister Lord Agnew, said:
”With academies helping to drive up standards in schools across the country – and more than 50% of children now studying in academies and free schools – it is important that trusts have clear guidance to help them use every pound to deliver a high standard of education.
Over the last 18 months I have committed to curbing excessive executive pay in a tiny minority of trusts to ensure it is fair and proportionate to the task in hand, and this approach is already yielding positive results.
This new guidance will help all trusts set executive salaries at a level that is publicly justifiable.
The new guidance builds on the Government’s continued drive to curb high pay of academy leaders, with Lord Agnew and Eileen Milner, Chief Executive of the ESFA, both writing to academy trusts over the last 18 months calling on them to justify or reduce their executive salaries, to ensure they match the standard of education on offer to pupils.
It also follows recent updates to the Academies Financial Handbook published last month to underline the importance of the appropriate use of public money and to help school leaders to run trusts that are effective, complaint and successful – this included refreshed material on the role of trustees and governing bodies and the importance of internal checks and systems.
More than 50% of children in state-funded schools in England now being taught in an academy or free school and so having sound financial management across these schools is vital, with this guidance being the latest step in the Government’s drive to improve accountability across all academy trusts”.
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