CST questions legality of CEO pay crackdown

The Confederation of School Trusts is questioning whether the government has the legal power to impose controls on academy trust chief executive pay.

The sector body for academy trusts has told members it is “testing the legalities” of the Department for Education’s new rules, which will require trusts to seek approval before advertising senior roles with salaries above £174,000.

The pay crackdown will also apply to performance-related pay above £25,000, the DfE announced yesterday.

In a briefing to members today, seen by Tes, the CST said the government was “attempting to make a unilateral change to the terms and conditions of staff it does not employ”.

It added: “As independent legal entities, we do not accept it is for a secretary of state to take a decision on individual salaries. We are testing the legalities of this.”

Crackdown on MAT executive pay

From September, as well as approval being needed for salaries above £174,000, CEOs will not be able to receive pay rises higher than the national teacher pay award.

The approval requirement will apply only to newly advertised posts.

At least 67 trust CEOs earned more than £174,000 in 2024-25, according to Tes analysis of financial accounts.

The CST said it was “not for CST to take a view on individual salaries”, but that its role was to “challenge poor policymaking”.

The DfE said the rules would be set out in full before September and would ensure that “taxpayers’ money is being invested where it is needed most”.

‘Deeply problematic’

CST chief executive Leora Cruddas described the announcement as “deeply problematic” in the briefing to members.

The changes would create “a new bureaucratic process that hinders recruitment and retention” and “misunderstands the role of trusts as employers”, she said.

The CST also warned the policy could make it more difficult for trusts to reward successful headteachers, as it limits their ability to give pay raises and keep pay differences between headteachers and the executives who manage them.

Teachers and leaders typically move up pay scales through increments, meaning their actual pay rise can be higher than the headline government pay award, Ms Cruddas added.

The new rule limiting executive pay increases to the teacher pay award, therefore, failed to reflect how school pay progression works in practice, she said.

Experienced headteachers working in large inner London schools can also earn up to £197,000, without needing permission from the DfE.

Sir Jon Coles, CEO of United Learning and a former director general of the DfE, suggested the government does not have the power to introduce the limit on pay.

He posted on X: “Hard to see that as anything other than an attack on trusts. Attracting and employing the best leaders is key to turning schools around.”

It was a “huge shame” the government did not consult the sector before announcing the changes, he added.

However, as Tes reported yesterday, Emma Balchin, chief executive of the National Governance Association, said the plans represented a “significant moment” after years of concerns about “unchecked executive pay”.

‘Shocking timing’

The CST also warned that the approval process could bring senior recruitment “to a standstill”.

Its briefing said the sector body did not have confidence that the DfE had the capacity to review and decide “hundreds of pay decisions each year”.

The new rules will be enforced through the Academy Trust Handbook from 1 September.

Compliance with the handbook is a condition of academy trusts’ funding.

The announcement of the limit on executives’ pay, made close to the end of the academic year, was “shocking” and had not been part of proposals put forward during the consultative review of the handbook, Ms Cruddas said.

She added: “This latest announcement is another attempt by government to run your organisations from Whitehall.”

The Department for Education has been contacted for comment.