Further to our briefing in November 2025 on the DfE’s updated guidance on Setting Executive Salaries, the focus of the Department for Education (“DfE”) remains on executive pay in academies.
MATs currently set executive pay through their boards of trustees, subject to the DfE Academy Trust Handbook requirements that remuneration decisions are transparent, proportionate, evidence-based and represent value for money. However, increasing scrutiny has followed reports of high academy CEO salaries, with it being suggested that almost 100 chief executives are earning more than £200,000, and at least one in excess of £500,000. Media reports suggest that only a quarter of the high earners were women.
In response, the government announced that academy trusts will require DfE approval before advertising roles over £174,000. The DfE Academy Trust Handbook 2026, which comes into force on 1 October 2026, reflects these requirements, providing as follows:
- From 1 October 2026, for new appointments within academy trusts where remuneration exceeds £174,000, or the pro rata equivalent for part-time staff, or performance-related pay above £25,000, approval from DfE must be obtained before the post is advertised.
- The trust must publish on its website in a separate readily accessible form the number of employees whose benefits exceeded £100,000, in £10,000 bandings, for the previous year ended 31 August. Benefits for this purpose include salary, employers’ pension contributions, other taxable benefits and termination payments. Where the academy trust has entered into an off-payroll arrangement with someone who is not an employee, the amount paid by the trust for that person’s work for the trust must also be included in the website disclosure where payment exceeds £100,000 as if they were an employee.
- The academy trust must ensure its senior employees’ payroll arrangements fully meet their tax obligations and comply with HM Treasury’s guidance about the employment arrangements of individuals on the avoidance of tax. This is described in HM Treasury’s Review of the tax arrangements of public sector appointees, which explains that senior managers with significant financial responsibilities should be exclusively on payroll, and therefore subject to Pay As You Earn with income tax and NI contributions deducted at source. Failure to comply with these requirements can result in a HM Treasury fine.
Existing executive salaries will not be affected.
In addition, future pay increases for academy trust executives must not increase at a faster rate than that of the academy trust’s teachers, unless there is a clear justification for it to do so. Where the academy trust considers there is a justification, it must seek approval in advance from DfE. The Government has stated that these changes are intended to bring academy executive pay more closely into line with other public sector frameworks, such as those operating in the NHS and further education sector. The government has also indicated that it may consider additional reforms to executive pay oversight in the future.
Next steps for schools and MATs
Boards, governing bodies and remuneration committees should review all existing executive remuneration policies and future recruitment plans. Trusts who are actively or planning to recruit senior executive positions with proposed executive salaries close to or above the £174,000 threshold should assess the impact of the new approval requirements and consider whether planned recruitment exercises may need to take account of additional regulatory processes.
It should be noted that these reforms are not a pay cap on executive pay per se, as MATs may still propose salaries above £174,000 but will need DfE approval before advertising the role; the effect of which is to impose a cap since most schools and MATs will not want to routinely be seeking consent for executive hires. To increase the likelihood of DfE consent being granted, remuneration committees should ensure that future pay decisions are supported by robust benchmarking evidence and clearly demonstrate value for money. In particular, it is highly recommended that remuneration committees take care to document the rationale for executive remuneration decisions, including organisational complexity, trust size, performance and market comparisons. Importantly, they must also follow the DfE Guidance on Setting Executive Salaries here: https://www.gov.uk/government/publications/setting-executive-salaries-guidance-for-academy-trusts/setting-executive-salaries-guidance-for-academy-trusts and the requirements of the Academy Trust Handbook.
Where a trust is proposing to engage a senior leader with significant financial responsibilities from 1 October 2026 they should be exclusively on payroll.
Academies should be mindful that “executive leader” or “senior executive leader” is not defined in the Academy Trust Handbook. Annex A of the above mentioned DfE Guidance on Setting Executive Salaries does provide a definition as follows:
“For the purpose of this guidance, executive leaders are defined as primarily non-teaching staff in leadership roles in which they are held to account for the standards across the academy trust.”
As such it is likely that the above changes apply to roles other than CEOs. For example it could apply to any non-teaching staff in a leadership role, such as CFOs, COOs, and even Executive Headteachers or Principals in a single academy trust, depending on the function they carry out. It should be noted that the section of the Academy Trust Handbook that deals with who should act as accounting officer, refers to this being a “senior executive leader, or in a single academy trusts the principal. As such it follows that a principal of a SAT or any individual in a MAT who is the accounting officer but may not be the CEO (for example, the CFO or COO) would arguably fall within the scope of the rules around executive pay.
MATs should also review their broader leadership succession plans. The Confederation of School Trusts has raised concerns that the new requirements may slow recruitment processes for larger trusts and affect the ability of boards to recruit and retain experienced leaders. MAT governing boards should therefore assess potential recruitment timelines and consider whether any upcoming appointments could be affected by the new regime and any requirement to obtain DfE consent prior to advertising/appointment.
MAT trustees should monitor forthcoming updates to the Academy Trust Handbook and related DfE guidance carefully. The detailed rules governing approval thresholds, evidential requirements, remuneration governance and ongoing pay progression are expected to be published before September 2026 and will be essential in shaping future executive remuneration decisions. We will be providing an update on all changes in the now published Academy Trust Handbook 2026 in September.
Finally, MATs and academies should be mindful of potential equal pay claims, on the basis that the information that has been reported in the press suggests that only a quarter of the high earners working in executive roles in academies are women. The law on equal pay is complex, but as a reminder there is nothing preventing a female CEO from comparing their salary with the previous CEO and, if the predecessor was male and their salary was more, an equal pay claim could be established. The same would apply if the genders were reversed e.g. a male CEO comparing themselves to a female predecessor who was paid more. Such claims may further be heightened by mandatory gender pay gap reporting.
This briefing is not intended to be a definitive statement of the law and is correct at the time of publication. It should not be taken as a substitute for professional legal advice. It does not represent the views of Winckworth Sherwood or any of the authors.
If you require advice in relation to the teacher pay award, industrial action or any other employment law or HR related issue for a school or MAT please contact our specialist Schools HR team on schoolshr@wslaw.co.uk or 0345 026 8690