On 6 November 2025 the DfE published updated guidance, ‘Setting Executive Salaries: Guidance for Academy Trusts’ (“the Guidance”). The Guidance has been updated to align with the executive pay sections of the 2025 Academy Trust Handbook (“the Handbook”). The Guidance is available here: https://www.gov.uk/government/publications/setting-executive-salaries-guidance-for-academy-trusts
The annual update to the Handbook which took effect on 1 September 2025 (but has since been further updated on 22 October 2025) includes updated requirements in relation to executive pay as follows:
“2.27 The board of trustees must ensure its decisions about levels of executive pay (including salary and other benefits) follow a robust evidence-based process and are a reasonable and defensible reflection of the individual’s role and responsibilities. No individual can be involved in deciding their renumeration. Decisions about executive pay can be challenged by DfE.”
“2.28 The board must discharge its responsibilities effectively, ensuring its approach to, and levels of, pay and benefits is transparent, proportionate and defensible.” This must be documented in an agreed pay policy which sets out the process for determining executive pay and includes:
- independent scrutiny by the board
- robust decision-making that demonstrates justifiable pay
- proportionality – that pay and benefits represent good value for money and are defensible relative to the public sector market
- documented decision-making with rationale and approval by the board
- a basic presumption that executive pay and benefits should not increase at a faster rate than that of teachers, in individual years and over the longer term”
The Guidance aims to support trusts and trust boards in making decisions about executive pay and seeks to further allow trust boards to be confident about, and accountable for, those decisions.
Decisions about pay should be well documented and may be open to public scrutiny. In addition, the DfE may request evidence to demonstrate that pay decisions are proportionate and justifiable.
It is important that trusts and trust boards read the Guidance, take steps to ensure that they are compliant with the requirements relating to setting and monitoring executive pay, and review and, where necessary, update their pay policies to reflect the requirements set out in the Handbook.
This updated Guidance comes as no surprise. In the last 12 months we have seen in increase in the DfE writing to trusts and querying the levels of executive pay, particularly as regards CEO pay.
Our expert team of education employment lawyers can support trusts with all aspects of pay, performance, and appraisal of executive post-holders in academy trusts.
This briefing is not intended to be an exhaustive statement of the law and should not be relied on as legal advice to be applied to any particular set of circumstances. Instead, it is intended to act as a brief introductory view of some of the legal considerations relevant to the subject in question.
For further advice on executive pay, including in respect of implementation or review of pay policies, the Academy Trust Handbook or any other legal issue in schools, please contact Winckworth Sherwood’s dedicated Schools HR helpdesk on SchoolsHR@wslaw.co.uk or 0345 026 8690.