12 February 2019
The academies minister, Lord Agnew, has written to 28 academy trusts to ask for more details on the pay of executives who earn more than £150,000 – and those earning £100,000 if two or more people in a school earn a six-figure salary.
This is part of the Government’s commitment to curb ‘excessive’ salaries based on the size, standards and financial health of trusts.
Academy trusts are required to publish high salaries in their accounts, providing a far higher level of public scrutiny than local authority schools.
In his letter, Lord Agnew asks the chairs of the trusts in question to justify salaries and reassure ministers that they are not “diverting financial resources that could be more effectively deployed on the front line of education.”
The minister calls on the trusts to work with the Government on the “divisive issue” of high pay. He states that executive pay must be proportional and defensible to the public sector market and should reflect value for money.
As reported in my blog on 20 December 2017, the Chief Executive of the Education and Skills Funding Agency had also previously written to academy trusts about the issue of high pay.
Fewer than 4% of trusts pay two or more salaries between £100k - £150k and the Department for Education want them to be more accountable for the money they spend, bringing them in line with the majority of academy trusts.
Lord Agnew went on to say:
“Academies are raising standards in schools across the country – replacing underperforming council-run schools in some of the most disadvantaged areas and helping young people to raise their aspirations through a better standard of education.
The best academies place freedom in the hands of school leaders but with that autonomy comes greater accountability and transparency, which is exactly why I am insistent that the salaries of their executives are justifiable. And just because we are advocates of the academies programme, doesn’t mean we won’t call a trust out where we believe they are not acting responsibly.
The overwhelming majority of academies are behaving responsibly and by publicly challenging the minority of trusts that are not complying with this request, we will ensure that every pound of public money is spent as effectively as possible to continue improving the standard of education in our schools.”
Trusts are also encouraged to use benchmarking as a useful tool when reviewing finances. This can assist schools and enable comparisons with others that have similar challenges.
At UHY we produce an annual academies benchmarking report which provides commentary on a range of topical issues.
Our 2019 academies benchmarking report will be available soon.
If you have any questions on the points highlighted in this blog, or on benchmarking, please contact your nearest UHY academy specialist.
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