The Academy Trust Handbook (ATH) 2026 takes effect on 1 October 2026 and significantly hardens the executive pay controls signalled earlier this year. The approval regime is no longer anticipated – it is now a confirmed obligation.

If your trust is seeking Department for Education (DfE) approval for a new appointment where remuneration exceeds £174,000, or where performance-related pay exceeds £25,000, you must be able to demonstrate that the pay decision is defensible, transparent and proportionate.

Boards that have already invested in robust executive pay-setting processes are well placed. They are not just complying with the Handbook – they are building the evidence base that the approval regime will demand from 1 October 2026.

A summary of the key changes on executive pay setting

The Academy Trust Handbook 2026 introduces the following confirmed changes relevant to executive pay:

• Pre-advertisement approval: Any new appointment where remuneration exceeds £174,000 (or the part-time pro rata equivalent), or where performance-related pay exceeds £25,000, requires DfE approval before the post is advertised.
• Executive pay growth constraint: Executive remuneration must not increase at a faster rate than the trust's teacher pay awards. Any exception requires advance DfE approval. This is no longer a basic presumption - it is a mandatory obligation. Any proposed executive pay increase that exceeds the teacher pay award in percentage terms after 1 October 2026 requires advance DfE approval, not merely a documented rationale. As a reminder, the teacher pay increase is set to be 3.5% from 1 September 2026.
• Pay policy requirements unchanged, but operating in a more regulated environment: The existing requirements for a documented, evidence-based pay policy, covering independent scrutiny, robust decision-making, proportionality and transparency remain in place and form the evidential basis for any approval application.

These changes are effective on 1 October 2026 and apply to all academy trusts in England as a condition of their funding agreements.

Pay ratios are now essential, not optional

Proportionality sits at the heart of any DfE approval decision. Pay ratios are the most powerful tool available to boards for demonstrating it. Three metrics give decision-makers an objective, cross-sector basis for comparison:

• Cost per academy: Executive pay expressed as a cost across the number of academies within the trust.
• Cost per pupil: Total executive remuneration as a per-pupil cost across the trust's roll.
• Executive pay as a percentage of total income: Placing the salary in the context of the trust's overall financial scale.

These ratios do something that a headline salary figure alone cannot: they demonstrate whether executive pay is proportionate to the scale, complexity and accountability of the role. This is precisely why the headline figures that attract media attention can be misleading.

A chief executive earning more than £500,000 per annum commands attention, but the ratios for that individual may well show a lower cost per pupil than a chief executive in a small trust earning £180,000. The ratios put the number in context – and context is what a defensible pay decision needs.

Benchmarking needs a rationale, not just data

Benchmarking has always been important, but the new approval regime raises the bar. It is not enough to produce a dataset showing where a proposed salary sits relative to sector comparators.

The board needs to be able to explain, in documented form, why those particular comparators are appropriate and proportionate to the specific trust. Why has a particular group of trusts been selected as the peer group? 

What characteristics of the trust – size, pupil demographics, geographic spread, financial complexity, accountability profile – justify the chosen benchmarks? And how does the proposed salary reflect the application of those benchmarks to the individual's specific role and responsibilities?

Benchmarking data without a rationale is a number looking for a justification. Benchmarking data with a clear, documented rationale is evidence of robust governance.

Where the real problems lie

In my experience, the vast majority of trustees approach executive pay with genuine seriousness and a clear understanding of their responsibilities. They know that they are spending public money; they know that their decisions must be defensible; and they struggle (often considerably) to attract and retain the calibre of leadership that their communities deserve while remaining within what they believe is publicly acceptable.

The cases that have attracted criticism and media scrutiny are not representative of the sector as a whole. Where genuine disproportionality exists, it tends to be found in trusts where the relationship between executive pay and the scale of the organisation is harder to justify, and that is not always in the largest trusts where headline salaries are highest but where scale and complexity provide a proportionate rationale.

Boards that have done this work properly – with rigorous pay-setting processes, robust benchmarking, documented rationale and full board approval – should be confident that a well-prepared approval application will succeed. The question is not whether the decision can be justified; it is whether DfE will review and approve it in time.

The ATH 2026 does not say how quickly DfE will process approval applications, nor does it set out the detailed criteria against which applications will be assessed. Don't wait until a vacancy arises to address these questions. The time to build a defensible, evidence-based approval application is before a vacancy exists, not after.

The Accounting Officer risk 

The most concerning governance question raised by the Academy Trust Handbook 2026 has received almost no attention in public commentary. What happens when a trust's Accounting Officer – the chief executive, who bears personal statutory responsibility for the regularity and propriety of all public funds - is leaving, and the replacement role now requires DfE approval before it can even be advertised?

From 1 October 2026, for new appointments within academy trusts where remuneration exceeds £174,000, or the pro rata equivalent for part-time staff, approval from DfE must be obtained before the post is advertised. Every trust must have an Accounting Officer in post at all times under the Handbook. That obligation does not pause while DfE processes an approval application.

This risk is particularly acute where a chief executive remains employed on a headteacher's contract. Headteacher notice periods were designed for a world in which a school could advertise and appoint a new head within a single academic cycle.

They are entirely incompatible with a recruitment process for an executive that now requires: 

• Benchmarking work to determine an appropriate salary.
• Full board approval.
• A DfE approval application with a processing time that is, as yet, untested in practice.
• An advertisement; a search or selection process; and a notice period for the successful candidate, which for a senior executive could be six months or more. 

The sequencing problem this creates is real and immediate.

Steps academy trust boards should take now

With the Academy Trust Handbook 2026 effective from 1 October 2026, here is our advice on the steps your board should consider now:

1. Review notice periods for all senior executive staff now. Where a chief executive or other senior executive remains on a headteacher contract, that notice provision is almost certainly incompatible with the timescales the new approval regime demands. The board should take legal advice on whether and how this can be addressed, and should not wait for a vacancy to arise before doing so. The window to act proactively is short.
2. Carry out benchmarking soon, not when a vacancy arises. Consider when you last undertook a rigorous benchmarking exercise for executive roles. If that exercise is out of date, commission an updated one as soon as possible. If a vacancy arises, planned or unplanned, a pre-existing, up-to-date benchmarking report removes a time-consuming step from an already compressed process. A DfE approval application without credible, documented benchmarking is unlikely to succeed.
3. Plan your interim arrangements and take legal advice on whether they require approval. The ATH 2026 requires DfE approval before advertising any new appointment where remuneration exceeds £174,000. On a natural reading, the reference to "new appointments" is broad and could apply to interim and acting-up arrangements as much as to permanent appointments. This question is not resolved on the face of the Handbook, and trusts should take advice on it now. The answer will materially affect how succession risk is managed and whether an internal acting-up appointment, at a salary below the threshold, could provide a compliant bridge while a permanent approval application is processed.
4. Act without delay where a planned departure is already known. Given that DfE approval must be obtained before a post is even advertised, any trust that is aware of an anticipated senior departure should initiate the process as early as possible, ideally before the incumbent has formally resigned.
5.  Audit all pay above £174,000, including headteacher salaries, for defensibility, proportionality and transparency. The board of trustees must ensure its decisions on executive pay levels follow a robust, evidence-based process and represent a reasonable and defensible reflection of the individual's role and responsibilities – decisions which DfE now has the explicit power to challenge. 
6. Where headteacher salaries exceed £174,000, boards should ensure the rationale is clearly documented and aligned with the trust's wider executive reward strategy. For context, L43 in Inner London will be £158,863 once this autumn's pay award is applied. 
7. Under paragraph 9.3 of the School Teachers' Pay and Conditions Document, governing bodies may exceed L43 where role-specific or candidate-specific circumstances justify a higher than normal payment, provided the maximum of the headteacher group is not exceeded by more than 25%. In exceptional circumstances, this means a Group 8 Inner London headteacher could earn up to £198,578.75 per annum.
8. Apply the same scrutiny to performance-related pay. DfE approval must be obtained before advertising any post where performance-related pay exceeds £25,000. This is not a governance aspiration, it is a mandatory pre-advertisement requirement. Boards should review whether any proposed PRP arrangements would trigger this threshold, and should not commit to a PRP structure above that level, even in an offer letter, without first obtaining DfE approval.
9. Map the pay growth constraint against your planned annual review. Before the next executive pay review cycle, the board should carry out a gap analysis comparing planned executive pay increases against the teacher pay award, which we know is 3.5% from September 2026. Any scenario in which executive pay is proposed to increase faster must now either be abandoned or supported by a clear documented justification and an advance approval application to DfE. This applies to all executive roles, not only the most senior post.

Data collection for the Brightmine/CST benchmarking survey 2026 is now open

For benchmarking data, Brightmine provides detailed, current salary benchmarking across the education sector, including executive and senior leadership roles in academy trusts. Its tools allow your trust to identify appropriate peer groups, apply sector-specific comparators and produce the evidenced benchmarking reports that a DfE approval application will need.

Together, robust legal advice from Browne Jacobson and reliable benchmarking data from Brightmine give trust boards the strongest possible foundation for executive pay decisions in what is now a significantly more regulated environment.

This year the salary survey has expanded beyond the executive leadership team to include all grades, covering teaching and support staff roles. This broader coverage will better support trusts operating in local employment markets and strengthen the ability to attract talent.

Once a trust has participated in the survey by contributing its pay data, it will receive:

• A free priority copy of the national summary report.
• An individualised analysis of its position within the national landscape.
• The option to subscribe to the full Brightmine Compensation Planning platform at a CST negotiated discount.

To be included in this year's data collection, please submit your data via Data Manager by Friday 21 August 2026.

Further help and support

Browne Jacobson's education HR, employment and governance teams have extensive experience advising academy trust boards on executive pay. We can support your trust through every aspect of the challenges described here – from auditing existing executive contracts for compliance risk, to advising on notice period provisions, to preparing DfE approval applications that are defensible, evidence-based and proportionate.

To discuss how we can support your trust, please contact Emma Hughes, Partner and Head of HR Services, at emma.hughes@brownejacobson.com.