Per pupil cost of MAT CEOs is eight times that of LA children’s services directors

A fortnightly blog by the education journalist Warwick Mansell exploring current education news and policy. Views expressed do not necessarily reflect those of the NEU (NUT Section)

13 November 2017

School cuts campaign cuts through How many highly-paid individuals does it take to supervise a group of schools, which together educate a given number of pupils?

It depends, it turns out, whether you want to spend a lot of money on organisational leadership through the academies sector, or much less through the local authority route.

I have recently carried out research which offered some insights into this question, looking as I did at the accounts of a sample of 15 local authorities from 2009-10 – before the widespread take-up of academies – and comparing them to data from 127 of the largest multi-academy trust accounts from 2015-16.

The accounts allow a comparison between the pay packages of local authority children’s services directors and their equivalents in the academy sector: the highest-paid person in a multi-academy trust (MAT), who is usually the chief executive.

I sampled the local authorities so that they were broadly representative of the sector as a whole in terms of size, though the MATs were obviously focused on the largest organisations.

It is also possible to check on the number of pupils in schools for which the local authority director of education was responsible, and to compare it to the corresponding total of students in schools run by each MAT.

The differences are stark.

In 2010, before the advent of the academies scheme at any significant scale, the answer, from my research, was that for each council area in my sample we had one local authority children’s services director, paid on average £132,000, who was responsible for schools which typically had 49,000 pupils between them.

Roll on to 2015-2016, and these numbers pale in comparison to the figures in the academies sector, where the leaders of those 127 MATs were being paid £142,559 on average, yet headed up groups of schools with only 6,200 pupils between them, again on average.

That means that where once we paid for one local authority children’s services director on £132,000 to lead organisations with nearly 50,000 pupils each, for the same number of pupils in the academies scheme we now have eight multi-academy trust chief executives, each earning £143,000 on average. To put it another way, the average LA director in 2010 was costing £2.67 per pupil, compared to a figure of £23 per pupil for a MAT CEO.

How on earth did this happen?

There are two factors, I think. First has been the deregulation of salaries under the academies scheme, which means there is now no cap on the possible pay of those leading academy trusts. This means that large salaries for people leading groups of schools with relatively small numbers of pupils are now possible.

But second, and probably more significantly in relation to the above, the academies programme has had the effect of vastly increasing the number of organisations now overseeing state-funded schools.

Where once there were only 152 local authorities, there are now in addition more than 3,000 academy trusts, each needing a leader.

This means that academy trusts are generally much smaller than local authorities. If we are paying roughly similar amounts for a MAT CEO, on average, as an LA director of children’s services might earn, the overall bill to lead such organisations will be much higher because of the number of MAT CEOs. So the local authority structure looks a lot leaner, in terms of this aspect of the overall bill for leaders of each organisation, than the comparator academies sector: we were making one leader go much further in terms of cost per pupil.

I would argue that no-one intended this when the academies scheme was being introduced under Labour, and was then fired up with “rocket boosters” by Michael Gove. Instead, it is just another unintended consequence of a policy which was extended for political reasons.

Some have argued that extra pay for chief executives might be counterbalanced by smaller overheads in terms of the pay for individual school headteachers. After all, heads may have less autonomy in MATs than in the maintained sector. But, even if that controversial idea were positive, it remains to be seen if we have seen this salary effect.

Is the answer, then, to reduce the number of MATs significantly, perhaps having a much smaller number of much larger organisations, since this would cut the overall salaries bill for these senior leaders? I’d argue that that would also be a mistake, since this would make multi-academy trusts even more remote from local communities than their governance arrangements make possible now.

Instead, the structural reforms of the past 15 years are crying out for root-and-branch review and change, starting, as I’ve argued recently, with the reintroduction of national pay scales.

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