How will the MAT CEO pay cap work?

School governance leaders have welcomed plans for tighter controls over academy trust chief executive pay, but trust leaders have warned that the change risks slowing down senior appointments.

The Department for Education has announced that multi-academy trusts will need government approval before advertising new chief executive salaries above £174,000.

Annual pay rises for MAT CEOs will also not be allowed to exceed the national teacher pay award.

The change was announced alongside the latest teacher pay offer and follows a pledge in the schools White Paper to tighten oversight of academy trust executive pay.

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

Education secretary Bridget Phillipson said the changes “will make MAT executive pay consistent with how senior pay is managed across the NHS, FE colleges and other parts of the public sector”.

But the announcement has prompted contrasting responses.

Mixed reaction to CEO pay cap

Emma Balchin, chief executive of the National Governance Association, said it was a “significant moment” after years of concerns about “unchecked executive pay”.

She said ministerial approval for salaries above £174,000, limits on bonuses without sign-off and a rule tying executive pay growth to teacher pay growth would give trust boards “real levers, not just guidance”.

However, Leora Cruddas, chief executive of the Confederation of School Trusts, said that the government appeared to have “rushed into these changes without consulting with school trusts to understand their impact”.

She said that trusts needed “strong and capable leaders” and warned that the changes were “the latest example of micromanagement from Whitehall”.

Ms Cruddas said: “We should be empowering trusts and local leaders to do what their communities need, not assuming the Department for Education knows best.”

Existing salaries not affected

The new approval requirement will apply to newly advertised salaries above £174,000, rather than existing salaries.

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

Trust leaders are paid up to £535,000, Tes has previously reported.

The £174,000 threshold is roughly equivalent to the prime minister’s salary. It is also above the top of the national headteacher pay range, which was between £143,796 and £153,490 in 2025-26, depending on where a school is located.

CST said today that the changes risked “limiting trust’s ability to reward successful headteachers, due to the need to maintain pay differentials between heads and their managers”.

The move was outlined in the schools White Paper published earlier this year, which said: “We will tighten the academy trust handbook by requiring executive pay increases to be proportionate and justified, to prevent excessive increases for individuals carrying out broadly similar roles.”

How CEO salaries are currently set

Unlike teacher salaries, which are set nationally, executive pay is determined by trustees.

While there is no rule requiring CEO pay rises to be aligned with teacher pay increases, many trusts use this as a starting point for remuneration decisions.

The Academy Trust Handbook also says that pay rises should reflect organisational scale and responsibility.

February’s White Paper added that the pay of trust executives must also be “transparent, evidence-based and reflect individual responsibility”.

This followed concerns about the salaries paid to some CEOs running as few as one school.

In 2023, the DfE wrote to a group of 37 “outlier” trusts, asking them to justify the 2021-22 pay of their most senior leaders.

Following this intervention, pay growth for these trust leaders flattened, Tes revealed earlier this year.

There has also been concern about the gender pay gap between CEOs, which has widened sharply in the past three years. The new rules announced today do not explicitly address gender pay.

CST said the new rules could add a “slow, bureaucratic process” to senior recruitment.

FE already faces pay controls

The government has already introduced a form of senior pay control for further education colleges, but this does not mean colleges are banned from paying leaders above a set amount.

Instead, FE colleges must seek approval from the Treasury before offering some senior pay packages above specified thresholds.

Since June 2025, colleges have needed approval for new senior roles where total remuneration exceeds £174,000, or where performance-related bonuses exceed £25,000.

This applies to chief executive or equivalent roles, or jobs paid at least as much as the CEO.

Approval is also required for changes to an existing employee’s pay or terms that would take them above the £174,000 threshold.

However, for current staff already paid above £174,000, colleges can apply annual pay awards of up to 6 per cent without further approval.

What is the NHS senior pay framework?

The NHS framework does not operate as a blanket pay cap. Instead, it sets expected pay ranges for “very senior managers”.

This includes chief executives and directors, based on the size and type of NHS organisation.

Chief executive pay bands at NHS provider trusts are based on the organisation’s annual turnover. For integrated care boards, they are based on the size of the population covered.

Each band has a minimum salary and a usual maximum salary, with an “exception zone” for cases where higher pay can be justified.

Most senior NHS appointments with a proposed salary above £170,000 have to be submitted to NHS England for review. Cases that don’t fit the framework are referred to the Department for Health and Social Care for approval.

The framework also links senior pay to organisational performance.

Senior managers in the worst-performing NHS organisations are generally not eligible for annual pay awards, although there are exemptions for newly appointed leaders brought in to turn around struggling organisations.

Extra payments, such as a 15 per cent recruitment premium for senior leaders appointed in struggling organisations and performance-related bonuses of up to 10 per cent of basic pay, are also permitted.

The framework does not include current senior managers.