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Time for a pay cap for academy CEOs?

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Time for a pay cap for academy CEOs?

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Warwick MansellWarwick Mansell is a freelance education journalist. He has written extensively on the academies and free schools policies and the national curriculum, assessment and accountability systems for newspapers including the Guardian, The Observer and the Times Educational Supplement. He is the author of Education by Numbers: the Tyranny of Testing (2007). You can follow Warwick on Twitter at @WarwickMansell.

A couple of years ago, I bumped into one of the most knowledgeable figures on school finance I have met in 20 years as an education journalist. Peter Downes is a past president of the Secondary Heads Association (now ASCL) who became an expert on the national funding formula.

But what Peter wanted to talk to me about this time was not the intricacies and merits of trying to even out the disparities in resources allocated to schools in different local authorities. No, instead it was something more personal.

Why, he wanted to know, had headteacher pay escalated so dramatically in the past 20 years? If memory serves me correctly, Peter said that in 1996, as head of one of the larger secondary schools in England, he earned £60,000 a year. Now, we have reached a very different place, with salaries in many cases several times that figure. How, in a time of austerity, could this be justified?

CEOs in the spotlight

Headteacher or academy chief executive pay certainly has come a long way since 1996. Peter was one of the best-paid school leaders of his generation: average pay for a secondary school head stood at £40,000 in 1996. But the current holder of the most-highly-paid title, Sir Daniel Moynihan, chief executive of the Harris Federation, was awarded £420-£425,000 in salary and benefits in 2015-16. With his employer making contributions to his pension pot at £50-£55,000, Sir Daniel’s total package last academic year approached £500,000.

Sir Daniel runs a very successful group of 41 academies employing 2,873 staff in 2015-16, mainly in south London. But his pay, which has risen 93 per cent since 2009 as Harris has grown, now dwarfs that of figures such as Sir Bernard Hogan-Howe, the outgoing head of the Metropolitan Police, on a reported £276,000 for 2016-17; the head of the British armed forces, Air Chief Marshall Sir Stuart Peach, who was paid £245-£249,000 in 2014-15 for leading 197,000 people; or the national medical director for NHS England, Professor Sir Bruce Keogh, who was earning £190-£195,000 as of last September. Theresa May, of course, earns £150,402 a year as Prime Minister.

Sir Daniel may be out on his own as the best-paid school leader. But it is certainly not unusual, now, to hear of the £200,000 executive headteacher or CEO. By my reckoning, among England’s largest 10 academy chains by income, six had a highest-paid employee on at least £200k, with Harris itself having four people earning at least that.

Sir Craig Tunstall, who heads a federation of primary schools also in south London, was in the news in November for a £330,000 salary plus £44k pension contribution. Colin Hall was reportedly paid £220,000 in 2015-16 as head of the single-school Holland Park Trust, again based in London. Also last year, Amanda Phillips was paid £213,018 for running five schools in the east of England.

These amounts are way in excess of national pay bands, which apply to local authority schools, which top out at £116,000 for a head in central London (PDF).

The TES reported in January that the general trend in increased school leader pay – Sir Daniel’s remuneration is at least 700 per cent of what Peter Downes’s was in 1996, as against inflation over that time which has been in the range 46-69 per cent depending on the measure used – has meant an increasing gap between the rewards for school leaders and classroom staff. Whereas in 2000, the latter earned 64 per cent on average compared to headteachers, in 2015 the ratio was 51 per cent.

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Highly-paid = highly-challenged?

Why does any of this matter? Is it not right that school leaders are rewarded for performing well in challenging roles, which may see them losing their jobs should exam results and Ofsted ratings fall?

Perhaps, but I think governors should think very hard before awarding inflation-busting remuneration rises for school leaders, at a time when schools seem to be facing their biggest cash squeeze since at least the 1990s.

In reporting on the academies sector in particular, I occasionally get the sense that increasing CEO salaries are being justified against the backdrop of that individual’s multi-academy trust having grown. This might seem reasonable, as responsibilities increase. And should not individuals be rewarded for increasing an organisation’s turnover and reach?

Yet there is a clear danger here. Salaries generally seem to be starting from a relatively high baseline, in the situation we have where still only a minority of schools are academies, let alone in multi-academy trusts. If a CEO’s salary had already been set to be ahead of the Prime Minister when the trust had a handful of schools, is it right that it continues to increase sharply as the number of schools increases?

An inflation of expectations

Over the coming years, government policy will continue to push towards a growing number of larger MATs. So those organisations will naturally expand as part of a trend driven not by individual CEOs, but by national policy. If remuneration rises to reflect that, then more money will be spent on leadership, and therefore away from the classroom, at a time when education budgets overall are shrinking in real terms.

Consider the situation where the academies policy ends up as the DfE seems to want it to, with perhaps several hundred MATs embracing maybe 30 schools each on average. In that case, we will have gone from a scenario whereby schools were grouped in 150 local authorities staffed by officials on relatively modest salaries, to one where we have hundreds of MATs, each led by CEOs where the £200k salary is far from unheard of.

It seems highly likely that this process will have pushed up the overall pay bill for school leadership dramatically, at a time of austerity.

A remuneration race?

Do we need a pay cap? Well my mind comes back to an email I received from a director of a multi-academy trust back in 2015, when I put it to him that the near-£400,000 package awarded in total to that trust’s CEO and his wife seemed rather large. I was told that “multi academy trust chief executives, executive principals, principals and headteachers are well-remunerated compared to other sectors, as it is a highly competitive market”.

That, perhaps, is part of the problem: the fact that, at least in the academies sector, pay is deregulated means that trusts may be caught in a kind of “race to the top” environment for chief executive remuneration which will be familiar to any observer of private sector trends. Is this appropriate, at a time when classroom teacher pay rises have struggled to reach one per cent in recent years? Will it help to retain good classroom staff? And is the leader so important to the organisation that he (it usually is a he) should be rewarded well in excess of the rise for those on whose work he depends?

I would advocate a return to national pay structures to resist these trends. Failing that, academy trustees should think very carefully about the next rise for the CEO. Peter Downes was sceptical about the rise of the superhead whose pay far outstrips that of teachers. And rightly so.

Questions for your board

  • What measures do we use to determine pay increases for our senior leaders?
  • As a board, would we have the confidence to turn down an increase for our headteacher? Are our professional relationships strong enough to withstand such a decision?
  • When was the last time a senior leader’s pay wasn’t increased? What were the reasons?
  • If we’re governing in a maintained school, would the proposed rates of remuneration for senior leaders be a factor – either positive or negative – in our decision about joining a particular multi-academy trust?
  • If our academy trust made a deliberate choice to limit the pay of senior leaders to national levels to ensure (for example) that we could maintain levels of teacher pay, would we be concerned about our chances of attracting the best candidates for senior positions? Would we hope that such a decision would attract those leaders for whom salary wasn’t the defining factor in their career?

 


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1Comment
  • Tobias Hayden
    Posted at 18:02h, 16 March Reply

    What possible talents do these individuals bring to an organisation? These enormous pay packets are attracting all the wrong people and encouraging the worst kinds of behaviour from those who want to scurry up the ladder and ride the gravy train. I’m for a maximum income and not just in education. I propose more democratic schools, much like worker co-ops, where all the employees have a vote and get to decide who the head is, how much they get paid and whether to change the school’s legal status to an academy. If it was down to the workers to vote, do you think any of these changes would have happened? Of course not. Who would vote for their boss to get a £400k salary while they’re stuck on minimum wage? No one. So maybe we should be campaigning for school democracy under the unbrella of a local authority and strip the power away from these increasingly unaccountable trustees.

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