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CfEE-HEPI roundtable, 18th September 2018

Senior executive pay in education

The question of what makes remuneration levels appropriate goes to the heart of what and who we think our institutions are for, the nature of their responsibilities, and how they operate. 
 
At this roundtable, the Higher Education Policy Institute (HEPI) and the Centre for Education Economics (CfEE) brought together senior leaders in education and policy experts in the field to consider how and on what evidence senior executive pay should be set; whether the scale of increases seen in the sector (particularly HE) are justified; just how global (and competitive) the education recruitment market really is; and how institutions and their trustees can become more transparent about their decision-making. Opening remarks were heard from Leora Cruddas, Chief Executive of the Confederation of School Trusts,
and Chris Sayers, Chair of the Committee of University Chairs. Below is a summary of proceedings and salient points that emerged.
 
As pay gaps across the sector have widened, the perception has taken hold that the employment rights and pay of academic staff in HE (and of teachers in Academies) are being eroded, while executives enjoy unwarranted increases in remuneration.
 
In a typical example, the Public Accounts Committee report on Academy finances (March 2018) highlighted what it referred to as ‘unjustifiably high salaries’ paid to some academy executives who are ‘us[ing] public money that could be better spent supporting front-line teaching staff’. Contrary to the report’s suggestion, very few MAT CEOs are paid more than £200,000. The cap on maintained sector head teacher pay is presently set at around £120,000. Leora Cruddas put the case that Academy Trust executives have additional responsibilities that warrant them being paid a bit more. Though arbitrary, the PM’s pay (£150,000), she indicated, is somewhere in the ball park of what is reasonable.
 
All were agreed that there is a great need for efforts to improve public understanding of the MAT chief executive role and awareness of what it entails. The Academies Financial Handbook has begun building out the previously sparse requirement for ‘a robust evidence-based process’ and for pay to be ‘reflective of the individual’s role and responsibilities’, which the new Confederation of School Trusts (CST) has made it a priority to expand upon, specifically on the matter of setting executive remuneration.
 
Like the CST at school level, at HE level, the Committee of University Chairs (CUC) was recognised by participants as a key voice in the debate. The CUC’s ‘Higher Education Senior Staff Remuneration Code’ was viewed by participants as a necessary and important response to the debates of the previous 18 months, though, as Chris Sayers pointed out, its stipulations were already recognised good practice across the sector. For the purpose of improving understanding of the business of universities and what is required of leaders, the CUC had also published a document entitled ‘The Context for the Higher Education Senior Staff Remuneration Code’. The VC role demands a wide skill set.
 
In schools, judging whether individual trusts have struck the right balance between the range of factors to be taken into account may be beyond the capacity of the present accountability framework. Understanding of local context and challenges, and the reputational risks involved for CEOs with under-performing or new schools, is especially difficult for ESFA representatives, inspectors and RSCs. Given these factors, it is appropriately institutional governors’ responsibility to define their expectations in respect to performance. Measures need to be pegged to meaningful targets. 
 
That the debate on the matter has become so charged in both schools and universities, many participants felt had much to do with governing bodies’ overlooking of the importance of providing a rationale for their decisions. There is now a pressing need to improve public understanding of what, in the round, universities do and how they operate, as well as, in the context of executive recruitment, specific institutional responsibilities and challenges that factor in to the calculation of remuneration packages.

 

 
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