The UK Government has announced a package of measures affecting executive pay for schools and academy trusts in England. 

From 1 September 2026, trusts must obtain prior government approval before advertising any executive role paying more than £174,000, and annual increases to existing executive pay must not exceed the teacher pay award. 

Separately, the Department for Education confirmed a 3.5% teacher pay award for 2026/27 and 3% for 2027/28, backed by £700m in additional funding in the first year, with support staff offered 3.3% through the National Joint Council process – an offer not yet accepted by trade unions. 

It also announced a reduction in employer contributions to the Teachers' Pension Scheme from April 2027, following the 31 March 2024 valuation.

On pay, workforce planning, and retention

Emma Hughes, Partner and Head of HR Services, who has worked with the CST and Brightmine to develop guidance on executive pay in trust boards, said: “This is a significant intervention that some trusts may feel infringes on their authority and there will be frustration at how it has been made without notice or consultation.

“In the short term, there are serious practical consequences that will impact trusts almost immediately given the tight timeframes involved and there being no guarantees the DfE will approve new hires by 1 September. 

“This is entirely incompatible with executive recruitment timelines and boards face a very real risk of losing candidates before permission is even granted. The NHS comparison the government keeps reaching for simply does not hold as NHS frameworks offer employers considerably more local flexibility than what is being proposed here.

“As trusts and the DfE get to grips with the new approvals process, we would hope to see this speed up and delays become factored into recruitment strategies. 

“More broadly, however, there may be concerns among the largest MATs that this creates a glass ceiling for the sector, generating ripple effects into other senior posts and the whole pay structure within trusts. While smaller trusts may be less affected, there’s a risk this new policy exacerbates the recruitment and retention challenge it faces. 

“The separate announcement on multi-year certainty is genuinely helpful in giving trusts the ability to plan budgets with more stability than they have had for years and will support the retention of teachers, but incremental pay increases alone will not fix the staffing crisis schools are in. 

“Our latest School Leaders Survey shows that employee engagement has fallen sharply – more than a third (35%) of leaders now report it negatively, up from just 20% last year. One of the most underappreciated drivers is the rising volume and complexity of parental complaints, which 23% of leaders said has been a contributing factor in losing staff over the past 12 months. 

"Our advice to schools is not to treat this announcement as a tick-box exercise of updating pay scales. Use it as a prompt to look hard at where your retention risks actually are – your support structures for staff facing difficult parental complaints, deployment decisions and culture around wellbeing. A pay award that lands in an organisation where morale is already fragile will not go as far as the numbers suggest.”

On employment contracts

Heather Mitchell, Partner in education employment, said: “It is important to understand that the two new requirements operate differently. The prior approval process – seeking government sign-off before a role can be advertised – applies only to new appointments above £174,000, with executives already in post not directly caught by that requirement. 

“However, the cap on annual pay increases rising no faster than the teacher pay award appears to apply to all executives, including those already in post. That is where the employment law risk sits. Where existing contracts have built in expectations of pay progression, applying this cap could amount to a unilateral variation of contractual terms, potentially giving rise to breach of contract claims. 

“HR directors should review executive contracts now, understand what existing entitlements exist, and take legal advice before making any changes to individual pay arrangements in response to this announcement.”

On academy trust governance 

Philip Wood, Partner in the education team, added: “This announcement cuts to the heart of what it means to be a trustee. Setting executive pay is not a discretionary activity, but a core governance responsibility, and the Academy Trust Handbook already requires boards to ensure executive pay decisions are transparent, proportionate and defensible. We are yet to have sight of the new version of the Academy Trust Handbook, despite it now being July. 

“Trust boards that have invested in building rigorous processes, properly constituted remuneration committees, evidence-led benchmarking, full board approval, clearly documented rationale, are now being told that good governance is not enough as they must also wait for a government official to agree before they can even advertise a post.

“This feels like scrutiny has been replaced by control. Trustees must be ready to defend decisions publicly and under DfE scrutiny, but they must also be able to act in the best interests of their trust in a timely way.

"The immediate priority for boards is governance housekeeping. This should involve reviewing your remuneration committee's terms of reference, checking your scheme of delegation clearly sets out who has authority to make pay decisions and at what threshold, and ensuring your board minutes properly record the rationale behind past executive pay decisions. 

“If the DfE does scrutinise a trust, you want a clean and well-documented governance trail, not gaps that create unnecessary questions.”