Tighter Restrictions on Executive Pay – a necessary first step
This blog explores the new executive pay restrictions introduced in the Academy Trust Handbook, why they matter for trust governance, and what further reforms are needed to give boards the confidence and consistency they have been calling for.
The headline from today’s updated Academy Trust Handbook is the new restrictions on executive pay in multi academy trusts (MATs). NGA has cautiously welcomed these changes, but care will be needed to avoid unintended consequences. Trustees tell us they would benefit from further support when taking these important decisions.
The case for change
NGA has long-called for stronger government action on executive pay in MATs. Not because most executives are overpaid – they are not, or because they do not make a huge contribution to their trusts and the young people they serve – they do. Instead, it reflects the fact that a small number of outlier salaries have compromised faith in the trust system. Eye watering pay figures have dominated the headlines and debate around MATs, overshadowing the enormous value they deliver to young people across the country.
Boards are desperate to make the right decisions on pay, to reward and retain the leaders they value while ensuring financial sustainability and meeting the expectation for awards to be “proportionate and justifiable”. But they have been trying to do this in a vacuum, with no centralised framework and a handful of excessive awards which distort expectations and benchmarking.
If done right, change can give boards renewed information and confidence to make the right calls in their context, whilst maintaining CEO remuneration as among the country’s best paid public sector roles.
What’s changing?
The changes announced last week and confirmed in the handbook today include:
- A requirement that executive pay must not rise faster than teacher pay without specific DfE approval, tightening up a similar expectation which already existed;
- A new provision that specific DfE approval is required for new appointments where total renumeration exceeds £174,000, and for performance-related increases of £25,000 or more.
These changes are notable but potentially quite modest – limiting executive pay rises to the same rate as teacher pay rises firms up an existing expectation, moving this from a “should” to a “must” and adding the requirement for DfE approval. The requirement for DfE approval for salaries set above £174,000 and increases of more than £25,000 is entirely new, but it bears repeating that it is simply a requirement for DfE sign-off, not a hard cap. How the Department use this new power will be key.
We are expecting further clarity from new guidance (due before September) on the process of preparing and submitting executive pay applications to the Department and the benchmarking criteria they will consider. This clarity will be vital for boards. We are also hoping for assurances that the Department will put mechanisms in place to avoid bottlenecks which delay approvals and therefore trust’s recruitment processes.
More to do?
The changes in this year’s Trust Handbook are therefore necessary but also limited. We are keen to see the Department go further with a banded framework for executive roles which considers trust size, geography and other relevant factors. With the creation of the School Support Staff Negotiating Body (SSSNB) for support staff and the return of academy teachers to the School Teachers' Review Body (STRB), trust executive leaders are now the only group in the school system whose pay sits outside a national framework. Our members struggle to see how this can be justified, with 87% of trustees in our autumn survey saying they wanted further guidance on suggested pay bands for executives.
As we explained in The Mature MAT Model, the trust system has matured and is delivering for young people across the country. But public perceptions have not always kept pace with that progress, and ongoing concerns about executive pay remain one of the key reasons why.
Our recent policy papers, The three strands of leadership and Governing in 4D, make clear that the contributions of trust executives are enormous and indispensable. But like any other public servants, their remuneration must be a proportionate and justifiable use of taxpayer funds, boards need the information and confidence to ensure this is the case.
Today’s announcement is a positive step, but we think further action will be needed and we will continue to work with the Department to make this possible.
Academy Trust Handbook 2026
NGA's summary of updates to The Academy Trust Handbook, Governance Guide and new Financial Support and Oversight guidance.
Michael Barton
Head of Policy and Impact
Michael spearheads NGA's policy work, through which we represent our members; champion governance; and advocate for change in line with our policy positions. This includes engagement with external partners such as government, parliamentarians, trade unions and other colleagues.