Academies and colleges bidding for a slice of a multimillion-pound government fund must “show restraint on executive salaries”, according to new criteria. 

Starting this year, applications for the Condition Improvement Fund, a £400 million funding pot ring-fenced for investment in school and college buildings, will be subject to new criteria which penalise academies and sixth forms that have failed to justify the six-figure salaries of top-paid staff.

It comes as the government continues to crack down on excessive pay at academy trusts. It has challenged 278 trusts over pay since 2017, of which just 51 (18 per cent) have since reduced their top salaries.

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All schools and colleges rated “good” or “outstanding” by Ofsted can now apply for the funding, but certain conditions must be met if they are to be successful.

Bids are assessed on point-based criteria, with marks deducted for bad practice.

For example, applicants will lose four points if they pay two or more salaries in excess of £100,000 or one salary over £150,000, and have failed to explain their reasons for doing so in line with the government’s high-pay challenge.

And schools and colleges will lose up to four further points if they have not submitted a financial improvement plan following a visit from a school resource management adviser.

Meanwhile, applicants who have signed up to the most recent government funding agreement will receive an extra point.

The Condition Improvement Fund can be used to expand classrooms, upgrade facilities such as sports halls or science labs, and address issues with the general wear and tear of school buildings.

Applicants with unsuccessful bids will still have the option of applying for urgent capital support to ensure that their buildings are safe for pupils and staff.

It comes after government guidance released earlier this year said the contracts of academy leaders should allow their pay to be cut if their trust’s financial position deteriorates due to poor management.

Education secretary Gavin Williamson said: “Following our huge investment in school funding with an increase of a total of £14 billion over three years, this year’s multimillion-pound fund will support our pledge to create more good school places and continue raising standards.”