Academy school leaders in England face pay cap to curb ‘banker-style’ salaries

The era of academy school leaders in England receiving “banker-style salaries” and hefty annual increases may soon be over, with the government to introduce limits on executive pay.Nearly 100 academy chief executives earn more than £200,000 a year, with pay in academy trusts equating to anything from less than £5 a pupil to more than £150. Only a quarter of the high-earners were women.The education secretary, Bridget Phillipson, is expected to announce a cap of £174,000 on academy trust executive salaries, with government approval required to advertise pay packages above that amount. She is also expected to limit future pay increases to the same annual awards agreed for teachers.An announcement is likely to come on Wednesday, followed by the annual pay recommendation for teachers in England from the government’s independent review body.Sources told the Guardian that Phillipson will require trusts running academy schools, including multi-academy trusts (Mats) responsible for state schools, to follow executive pay rules similar to those used in the NHS and further education colleges.The Department for Education declined to comment, but a government source said: “This is a straightforward matter of fairness, for both the taxpayer and teachers.“Academy trusts are doing brilliant work for millions of children. But we simply cannot have double-figure pay rises on top of six-figure salaries. These are salaries paid for by the taxpayer, and excessive rates risk diverting funding from frontline teaching.”The move comes after the government said in February’s schools white paper that it wanted to tackle “unjustifiable” executive pay.A recent survey of academy trust executive pay by Schools Week found that Dan Moynihan, the chief executive of the Harris Federation, which runs 55 academies, was the highest paid with a salary of £530,000 last year. Among other high-earners was Dayo Olukoshi, the executive principal of Brampton Manor trust, which runs two schools, with a salary of £350,000 after a £20,000 pay rise.Around one in four academy trust chief executives received a pay rise greater than that given to classroom teachers in 2024-25, many receiving double-digit increases.A Labour source said that “banker-style” salaries were inappropriate for administering academies funded by public money.skip past newsletter promotionafter newsletter promotion“Many academies are doing great things and we continue to back them,” the source said. “But with freedom comes responsibility, and on executive pay, this has not always been exercised in the sensible way the public would expect.“Admirably, the Tories recognised this was a problem, but their voluntary approach didn’t work, and six-figure salaries have soared in recent years.“That’s why we’ll now be treating executive salaries in school trusts no differently from the rest of the public sector, making sure they’re a fair and accountable use of taxpayer cash.”Nearly 90% of secondary schools in England are academies, and the £174,000 cap will not affect the majority of trusts, which pay salaries closer to those of secondary-school heads. The Schools Week analysis found that chief executive pay in more than 1,000 trusts averaged £142,000 a year.The move is likely to be applauded by teaching unions. The National Education Union has said there was no justification for inflated chief executive salaries.The teaching unions will also be watching for the report of the schoolteachers’ review body (STRB), expected to be unveiled later on Wednesday, and the government’s final decisions on teacher pay for next year.The DfE recommended to the STRB that teacher pay should rise by 6.5% spread over three years between 2026-27 and 2028-29, with higher awards in the second two years.The unions, however, are concerned that schools may not receive any additional funding to cover the pay rises. Phillipson suggested in her remit letter to the STRB that schools could use budget “efficiencies” to find the money.