Government funding boss orders academy trusts to justify executive pay

The Education and Skills Funding Agency has written to the trustees of academy trusts with just one school that have staff earning more than £150,000 a year to ask for justification of the salaries.

The letter, from new ESFA chief executive Eileen Milner, specifically targets so-called “single-academy trusts” and requests further information on their “rationale for setting this level of salary”.

This year’s academies annual accounts revealed that 102 academy bosses were paid over £150,000, although it is not clear from the document how many of those were in charge of trusts with just one school.

Trusts have a responsibility to ensure value for money and that salary payments are transparent, proportionate, reasonable and justifiable

In her letter, Milner highlighted the “considerable scrutiny” over taxpayer-funded executive salaries that has emerged “in recent months”.

“Whilst I recognise the excellent work that is carried out in many trusts to deliver high quality education to children, trusts have a responsibility to ensure value for money and that salary payments are transparent, proportionate, reasonable and justifiable.”

She explained that a new requirement in the academies financial handbook meant boards of trustees must ensure their decisions about levels of executive pay “follow a robust evidence-based process and are reflective of the individual’s role and responsibilities”.

“In line with this new requirement, I would be grateful for further information on the rationale for the level of pay you set and the due process followed.”

The letter even includes a form for trusts to fill in, and they have been asked to set out the role and responsibilities of the individuals with large pay packets, as well as the “level of challenge” involved in their job.

A second version of the letter, sent to trusts at risk of experiencing financial difficulties, also sets out how such trusts should be “reviewing all aspects of your
expenditure, including salaries”.

Trusts in receipt of the letter have told they must respond by December 15.