The Department for Education has updated its guidance on setting executive salaries for academy trusts, alongside the Academy Trust Handbook 2026. The changes introduce direct DfE oversight of certain senior pay decisions and take effect from 1st October 2026.
Key changes
- Approval before advertising high-paid roles: trusts must obtain DfE approval before advertising a new executive appointment where proposed remuneration exceeds £174,000, pro-rated for part-time roles, or where performance-related pay exceeds £25,000.
- Controls on executive pay increases: executive remuneration must not increase at a faster percentage rate than the trust’s teachers’ pay unless prior DfE approval is obtained on the basis of clear justification.
- Broad definition of remuneration: the £174,000 threshold covers base salary, fees, allowances and pension provision above the normal level available to comparable staff. Performance-related pay is considered separately.
- More robust evidence expected: boards must show that pay is reasonable, proportionate, defensible and represents value for money, taking account of the role’s responsibilities, affordability, public-sector comparators and relevant benchmarking.
- Governance safeguards remain central: executive pay must be independently scrutinised, the individual concerned must not participate in deciding their own remuneration, and the board’s rationale and approval must be fully documented.
- Written pay policy required: each trust’s agreed pay policy should explain its decision-making process, independent scrutiny, approach to proportionality and value for money, and how decisions are recorded.
- Transparency obligations continue: trusts must continue publishing the number of employees whose benefits exceed £100,000 in £10,000 bands and ensure that senior payroll arrangements comply with tax requirements and HM Treasury guidance.
