Contribution
My Lords, I am aware that it is very late at night indeed. I have waited a long time to bring the amendment but, anyhow, it is not a long speech. The amendment is very simple. It makes one addition to the Bill, and that is to bring chief executive officer pay, usually of a multi-academy trust, but it might be of a single academy trust, under the remit of the School Teachers’ Review Body. This is a necessary step to advance the good use of public money in the provision of education for the nation’s children.
As we know, this is, or at least it was, a cross-party concern. My noble friend Lord Agnew is not here, but when he served as Academies Minister in the last Government, he was highly concerned about the apparently exponential rise in the pay of multi-academy trust CEOs. Indeed, so grave was his concern that, on two occasions, I think, he wrote to the chair of trustees of MATs that were awarding what he considered to be excessive pay rises to their CEOs and called them into his office to meet them and hear the justification for the awards. If he were here, I would have assured my noble friend that I would have very much liked to be a fly on the wall at those meetings.
In 2018, my noble friend wrote a letter to the chairs of academy trusts in England saying:
“I want to emphasise the priority that I attach to the responsibility you and your boards have to ensure that your executive teams manage their budgets effectively and deliver the best value for money. This is particularly important when looking at the pay of your senior leadership teams”.
He added that the then chief executive of the Education Skills and Funding Agency had written to a number of single academy trusts where remuneration for a trust employee was over £150,000 and he would be writing to all MATs where this applied too. He added:
“I believe that not all boards are being rigorous enough on this issue. CEO and senior pay should reflect the improvements they make to schools’ performance and how efficiently they run their trusts. I would not expect the pay of a CEO or other non-teaching staff to increase faster than the pay award for teachers”.
In 2019, my noble friend Lord Agnew wrote again to the chairs of boards of trusts in a letter headed “Excessive High Pay to Employees”, requiring information from those trusts on the salaries and bonuses paid to individuals in those trusts earning more than £100,000. This might not happen too often, so it is perhaps a little noteworthy that I entirely agree with my noble friend. I entirely agree that the pay of CEOs and other non-teaching staff should not increase faster than the pay award for teachers. But my amendment is more conservative than that, with a small C. It would simply put the pay of MAT CEOs and single academy trust CEOs within the remit of the School Teachers’ Review Body, as is teacher and school leader pay.
I gave evidence to the STRB for over 20 years, both as general secretary of the Association of Teachers and Lecturers and the joint general secretary of the National Education Union. The process of giving evidence is rigorous. STRB witnesses are required to submit detailed written evidence to the board on the pay awards that they feel are necessary and just for teachers and leaders. The evidence takes into account the relative pay rises of other workers in the public and private sectors, the state of recruitment and retention in the teaching profession and a host of other wage economy evidence. The STRB then holds in-person oral sessions where witnesses are required to elaborate and build on their written submissions. The review body then considers all the evidence it has been given, including evidence from the Department for Education, and makes a recommendation to the Government which the Government must then decide whether or not to accept. All this amendment would do is put in place the same rigorous arrangements for CEOs of single and multi-academy trusts.
This is a necessary step because there has been an inflationary spiral in CEO pay. Schools Week, the trade newspaper, conducts an annual executive pay investigation, which this year included 1,800 trusts. What this analysis found was that the gap between the CEO and other staff in multi-academy trusts is widening the pay gap. Sixty-four CEOs earned more than £200,000 a year. Five multi-academy trusts registered increases of over 20% or more in CEO pay. Now these pay rises may be justified. The problem is that the taxpayer does not know the reasoning behind them and we do not have an agreed definition of what the job description of a CEO is. How is it different from a head teacher? What is the job weight and how is it weighed by the boards, by the governing bodies?
The danger in a lack of appropriate regulation of CEO pay was well articulated by Sam Henson, deputy CEO of the National Governance Association, who remarked that salary benchmarking for CEOs was
“in some cases, leading to inflationary spirals”.
He added that the benchmarking exercises
“don’t come with an accompanying narrative on how this deals with the massive pressures the sector is under, namely money being … in short supply, ongoing recruitment and retention challenges, and insufficient accountability”
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