Academy CEO pay ‘name and shame’ policy under review

The government is reviewing its policy to name and shame academy trusts that pay their chief executives excessive salaries.

The review sparked calls from sector leaders not to abandon the crackdown altogether, although some said the warning letters were too crude a measure.

The Education and Skills Funding Agency (ESFA) has written to hundreds of trusts about high salaries since 2017, but blamed unspecified data collection issues earlier this year for pausing the letters.

Now a freedom of information request shows ESFA has decided to review its overall approach on pay “and ensure that we deliver robust challenge on high pay in a way that is fair, reasonable and transparent”.

Emma Knights, the chief executive of the National Governance Association, said: “It’s really important the spotlight’s kept on executive pay to ensure public funds are used to best effect for education.”

She said only a small number of leaders were paid excessively, but it “brings trusts into disrepute”.

DfE quiet on scope of review

The government would not provide further details of what the review would look at.

It is understood that before the reshuffle, ESFA was considering new methodology for deciding which trusts to target, rather than scrapping letters altogether.

New ministers’ views are not known.

“The DfE should not only reflect on the quality of their data, but also improve the apparent inappropriate, over-simplistic way the data is used,” said Sharon O’Ryan, the founder of Pay in Education, the salary benchmarking specialists.

All trusts with leaders paid more than £150,000, or multiple £100,000-plus salaries, receive letters asking for justification. The trusts’ names are published on the government’s website.

An NGA survey, published today, suggests most trustees balance many factors when setting leaders’ pay.

The most cited was the School Teacher’s Pay and Conditions Document, which includes leadership pay scales based on pupil numbers, location, performance and other factors.

More than 66 per cent of respondents in MATs said they referred to this statutory guidance on pay in maintained schools, despite academies’ freedom to ignore it.

Kevin Courtney, the general secretary of the National Education Union (NEU), said the statutory framework “needs strengthening” however, as well as extending to academies.

This should not only eliminate “excessive” salaries, but also ensure fair pay for other school leaders who “aren’t paid what they deserve”.

Executive performance was the next most common factor used to determine chief executive pay (63 per cent), down from 72 per cent last year.

Benchmarking with similar trusts was the third most-considered factor (60 per cent).

Benchmarking risks ‘rush to the top’

Leora Cruddas, the chief executive of the Confederation of School Trusts, said it was working with partners to build much-needed national benchmarking data.  But Knights warned benchmarking could spark a “rush to the top” on pay.

Affordability was ranked only fifth among the most-considered factors. Only 54 per cent of 728 MAT board members and 515 local governing body members polled said their trusts considered it, although 31 per cent said they did not know.

The larger the trust, the less likely it was to mention affordability.

“Larger trusts are multi-million pound organisations where leadership skill and functional expertise required is more specialised and complex, and this comes with a higher price tag,” O’Ryan said.

Chief executives were essential, but the size and scope of the talent pool drove salaries, leaving trusts “between a rock and a hard place”.

Only 16 per cent of NGA survey respondents said their trusts considered the gap between top pay and average or lowest paid-employees.

The Department for Education did not respond to a request for comment.

117 trusts sent warnings based on dodgy data (on A-level results day!)

Schools Week’s FoI also reveals 177 trusts received letters last August based on incorrect data.

Two months later, follow-up letters revealed the ESFA “had to reconsider the basis of this high pay exercise” and halt naming trusts. It blamed a “significant number of trusts” for “incorrectly” submitting 2019 pay data, with re-analysis of data ongoing last month.

The ESFA also chose A-level results day to send the letters, with headteacher board minutes showing that angry school leaders raised the issue with one regional schools commissioner.

A trust leader told Schools Week it was “superfluous summer holiday meddling”.