Academy trusts experiencing financial difficulties or declining standards are being urged to think carefully about how they justify chief executive pay, in a new report.
An analysis of academy finances found that almost a third of chief executives at multi-academy trusts were paid more than £150,00 in 2016/17.
Figures in the UHY Academies benchmarking report shows the average salary for a MAT chief executive in the trusts they sampled was £127,576.
Last year, Education and Skills Funding Agency chief executive Eileen Milner wrote to trusts who pay CEOs more than £150,000-a-year asking for a justification.
In the new report, the accountants UHY Hacker Young report said: “Given the level of obvious scrutiny, it is vital that your trust has robust systems in place to justify all executive pay, not just for remuneration over £150,000.
“Trusts are encouraged to benchmark their executive pay to help evidence their decisions.
“We would suggest that trusts that are experiencing any decline in educational standards, severe financial pressures, or other serious issues, should be particularly careful in how they justify remuneration. “
The report highlights a meeting of the Public Accounts Committee, in January, this year in which it was noted that a number of smaller trusts paying more than £150,000 to their chief executives had been “unable to justify the decision with a reasonable explanation.”
Figures in the UHY report showed 12 per cent of MAT chief executives were paid more than £200,000; 7 per cent were paid between £175,000 and £200,000 and another 12 per cent were paid between £150,000 and £175,000.
The UHY report shows a mixed picture for the finances of MATs.
It said that over half suffered a deficit, with 30 per cent experiencing a deficit of more than £250,000.
However, it also said there were a number of well-managed MATS generating large surpluses. UHY said that of its sample of MATs, 23 per cent showed a surplus of more than £250,000.
It adds: “This suggests that some MATs are managed and structured very well and have a financially sustainable model whilst others, maybe those that are still settling down as trusts, have substantial progress to make.”
The report also notes the rise of the MAT. It said that in 2016/17 38 per cent of trusts were MATS, responsible for more than one school, up from 30 per cent the previous year.
Last year’s annual Kreston Academies Benchmark Report found that multi-academy trusts are requesting and receiving “significant additional grants” in order to take on struggling schools.
It said that in 2016-17, 350 multi-academy trusts (MATs) shared £30 million from the Department for Education’s Regional Academy Growth Fund (RAGF) to help build capacity and help schools that were converting to academy status, or being transferred from one trust to another.
