The Association of Colleges (AoC) has launched a consultation with member colleges on pay for senior staff, amid growing public pressure to act over excessive pay.
The organisation’s governor council has proposed a new remuneration code to offer more guidance to governing bodies on senior pay, stating that this should be based around the three principles of fairness, independence and transparency.
Analysis by Tes of data from the Department for Education shows senior pay in colleges has been creeping up over the past three years. The most recent college accounts for 2016-17 show that 17 colleges paid their principals a salary of more than £200,000 compared with 12 in 2015-16 and eight in 2014-15.
AoC chief executive David Hughes said it was imperative that colleges could “show openly how they are acting correctly” when justifying senior pay rates.
'Strong public interest'
Mr Hughes added: “We have seen the strong media and public interest in senior pay in the private sector, as well as the public sector, and most recently there has been a lot of concern expressed about senior pay in universities.
“The code builds heavily on good practice in colleges, as well as best practice in the corporate, charity, HE [higher education] and other sectors, and will help ensure that governing bodies can demonstrate fair, transparent and justifiable decision-making.”
The clampdown on senior pay in further education comes as the new HE regulator has moved to tackle excessive executive pay in universities, where pay for vice-chancellors averages more than £280,000.
Nicola Dandridge, chief executive of the Office for Students, outlined plans to the Commons Education Select Committee last December to force the HE sector to justify all salaries above £150,000.
She said: “There is a sense in which some senior salaries have got out of kilter and there is a legitimate public concern about the levels of some of the salaries.
“If the pay can’t be justified, then we will have to get into a discussion with the institution about what happens next. But we have an array of tools and responses available to us to deal with it.”
The new code informs governors on how to set fair and appropriate pay; offers guidance on transparency and severance arrangements; and proposes new annual-reporting arrangements.
Atholl Stott, chair of AoC governor council, said the principles of the new code are key to ensuring that pay levels are both “reasonable and appropriate”.
He added: “We’re committed to good governance, to promoting transparency in how resources are used in our colleges, and to ensuring that the pay of the most senior staff in colleges is fair and attractive, to ensure we can attract and retain the skills and knowledge necessary to deliver.”
The 10-week consultation takes place from Friday 14 September to Friday 23 November.