End pay bonanza for heads, academies told

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 on Friday 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.

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 multi-academy 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 transparency 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.”

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.