End £150k fat cat pay bonanza for heads, academies ordered

ACADEMY schools must curb ‘excessive’ fat cat salaries or face government intervention, the Education Secretary has warned.

Damian Hinds ordered all academy trusts handing out large pay packets to provide written justification ahead of a crackdown next year.

He said that while generous salaries can be justified to attract the ‘best people’, they must be ‘proportionate’ to ensure value for money for the public purse.

Figures released yesterday show the number of trusts paying salaries of £150,000 or more has risen to 125.

The Education Secretary’s warning signals a tightening of reins on academies, which for two decades have had freedom over their spending, leading to a rise in senior pay.

The salaries have drawn sharp criticism, especially at a time when head teachers are teaming up with Labour to accuse the Government of starving schools of funding.

Mr Hinds said while he wants academies to retain ‘freedom and leeway’ on finances, this should also be ‘subject to a recognition that it is public money’.

He told the Daily Mail: ‘It is right that we have freedom for multiacademy trusts to be able to hire the best people to run schools. I think also that’s what parents would want.

‘And some trusts these days are very big complex organisations and it’s like running any other large organisation – and I think it can be justifiable to have high salaries. I think it’s also right that we have transparthat’s ency and that people are able to justify if there is high pay, why there is.

‘And there is a legitimate public and taxpayer interest in making sure that money isn’t being excessively spent.’

Mr Hinds said getting to grips with senior pay is ‘important for the integrity of the system’ so parents can see the return on their taxes. ‘I’m urging people to make sure that pay is proportionate to the size and complexity of the job,’ he added.

‘People need to think about how pay fits in with other people’s pay, including teaching staff pay and other staff pay in the organisation – £150,000 is a lot of money, and compared to the average income it is a great deal of money.’

In July, the Government’s Education and Skills Funding Agency wrote to all academy trusts paying at least one person a salary of over £150,000, or two or more salaries of over £100,000.

It demanded information about the ‘rationale’ for setting salaries at this level, and about the responsibilities the staff have.

Any academies ignoring the request face being penalised in a new ‘ financial capability assessment’ due to be launched next year or 2020 at the latest. The new rules will strengthen the ‘financial oversight’ criteria and make it easier to clamp down on academy trusts that waste money.

Those that cannot manage their finances properly will face Government intervention – and could ultimately have their schools taken over by another trust.

Mr Hinds said: ‘ There will be occasions when a letter reminding them of this benchmark figure of £150,000 will prompt people to think again and to examine the case and the rationale, and I think that’s a good thing.’

Already, 18 of the trusts which paid salaries of £150,000 have replied to the Education and Skills Funding Agency to inform it that this is no longer the case.

Many more have indicated they will work to revise high salaries and prevent unjustified pay inflation in the future. But Mr Hinds added: ‘ In other cases [ the pay] will be justified, because you’ve got very big organisations.

‘[ The trust] could be many schools, and sometimes quite different types of schools as well, and a big organisation to be running with big revenues and managing costs and personnel.’

Academies are independent of local authority control and have freedom over their finances and daytoday decisions, reporting directly to central government.

Many are brought together in groups run by multiacademy trusts. The chief executives of these organisations tend to be the best paid. Around twothirds of secondary schools and a quarter of primaries are academies.

Mr Hinds said the academies programme is ‘more transparent’ than the old local authority education system and encourages more ‘innovation’. He believes academies – including free schools – can help pupils, particularly in disadvantaged areas, because they can ‘raise the bar’ of expectation in the local district.

‘We’ve seen those benefits across the country but in particular it has helped to have an impact on children from more disadvantaged backgrounds,’ he said.

Mr Hinds also urged more ‘good people’ to come forward to become trustees and governors of academies as ‘part of that job is holding the executive to account including on things like pay’.

His comments come as new Department for Education figures show 125 academy trusts paid bosses more than £150,000 in 201617 – up from 121 trusts the previous year.

‘A great deal of money’