The Pay of Academy Staff

In the same week that I asked a question of Oxfordshire’s Cabinet Member for Education about the number of employees with salaries over £150,000 in Multi-Academy Trusts operating in Oxfordshire, the Public Accounts Committee has commented on the same issue in a report published today. https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/760/76002.htm

The Cabinet member was unable to answer my question as, not surprisingly, the county doesn’t collate the information. However, in my supplementary question, I identified five MATs, all with HQs outside the county, where there was on officer listed in their 2017 accounts as being paid in excess of £150,000. In due course, my list will appear on the county council website and I will publish the link here.

In the Public Accounts Committee Report, issued today, it is clear that the government wrote to all stand-alone academies where in their accounts up to August 2016 there was an officer paid more than £150,000 to ask for an explanation by the 15th December 2017. I haven’t seen an FOI request for the responses. The original letter from the ESFA of 4th December only went to 29 single academy trusts (i.e. academy trusts with only one school in the trust) where the ESFA could identify from the accounts that the trust was paying at least one person over £150,000 and was to ask why such large sums of money had been paid.

In February this year, the Minister wrote to all Chairs of academy trusts in England saying:

 ‘I believe that not all boards are being rigorous enough on this issue. CEO and senior pay should reflect the improvements they make to schools’ performance and how efficiently they run their trusts. I would not expect the pay of a CEO or other non-teaching staff to increase faster than the pay award for teachers. I intend to continue to challenge this area of governance. My view is that we should see a reduction in CEO pay where the educational performance of the schools in the trust declines over several years.’ DfE letter 21st February 2018 reference 35 in the PAC Report.

There has been a history of neglect over senior staff salaries dating back to the Labour government and the emergence of the Executive Head or Principal position soon after the start of the century. Such a grade was never formally recognised in the pay and conditions agreements, and once Mr Gove freed up pay for academies, with no government restraints in place, it was open season for those that wanted to see pay rise to closer to what could be earned in the commercial sector. Buying former DfE officials was also always going to be expensive, but was no doubt one of the justifications used. Using public money to pay related parties is often even less acceptable, as the PAC note in their Report.

We heard of related party transactions where the rules were not properly followed, or where there were doubts about the propriety of the transactions. For example, Wakefield City Academies Trust purchased IT services worth £316,000 from a company owned by the Chief Executive of the Trust, and paid a further £123,000 for clerking services provided by a company owned by the Chief Executive’s daughter. We similarly heard that the founder of Bradford Academy, who was a former teacher, was ordered to repay £35,000 after being sentenced to prison for defrauding the school. The founder and other former members of staff at Kings Science Academy paid £69,000 of Government grants into their own bank accounts. There have also been problems with related party transactions at the Bright Tribe Academy Trust, which resulted in schools being removed from the Trust.

Academy trusts are required to demonstrate to the satisfaction of their own auditors that related parties have not made a profit from the relationship (i.e. that transactions are at cost or below). We were concerned that determining whether a service has been delivered at cost is dependent on information from the supplier, who may have a vested interest in manipulating or inflating this information and is in a position to do so. We questioned whether there were incentives for trustees to take advantage of the system, due to the weaknesses in the system of oversight. The Department, noting our dissatisfaction with the current processes, committed to reflect on the adequacy of the current arrangements. Following our evidence session, the Parliamentary Under Secretary of State for the School System wrote to all Chairs of academy trusts to remind them of the need to scrutinise any related party transactions, and to ensure that a full and proper procurement process is following and the trust is able to demonstrate that the services have been provided at cost.

Paragraphs 10 and 11 of the PAC Report: https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/760/76002.htm

Should local authorities be required either to provide audit services for all academies or at least to review the accounts of those academies with responsibility for schools within their locality? The LGA could apportion responsibility for MATs that cross boundaries in order to ensure that all are looked at by at least one authority that could then report to the appropriate local scrutiny committee.

Public money, especially in a time of austerity, should be spent in the most effective way. TeachVac has cost the government nothing, but demonstrate how a low cost recruitment site works for the benefit of all. The notion of ‘public service’ and not ‘profit from public funds’ must once again be to the fore.

 

 

 

 

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Pay flexibilities for teachers

According to the DfE’s evidence to the School Teachers Review Body (STRB) only 64%, just fewer than two out of three schools, pay any of their staff Teaching & Learning Responsibility allowances (TLRs as they are usually known). I guess that most of the remaining nearly 8,000 or so schools are mostly small primary schools, with only a handful of teachers and a head teacher?

Interestingly, some of these schools may be making other payments, as the DfE record that 75.2% of all schools make some form of payment to some of their teaching staff. Indeed, there are more schools making ‘other payments’ than are using the SEN payments allowed under the teacher’s contract. Less than one in five school now make any such SEN payment to teachers.

Even less common, despite all the talk about a recruitment crisis, is the use of recruitment and retention payments to teachers; only one in ten schools across England makes such a payment. However, the percentage does rise to one in five schools in the Inner London area – That’s not technically a region and the DfE evidence doesn’t define what it means by Inner London and whether it is pay area or some other definition. By contrast, only one in twenty schools in the South West makes any payments to a teacher or teachers for recruitment and retention reasons.

Do schools make use of HMRC exemptions from tax for new employees? (https://www.gov.uk/expenses-and-benefits-relocation/whats-exempt). This allowance can be helpful to those teachers and school leaders moving to a new part of the country. Such payments would, presumably, be reported in the ‘other payments’ column of the  DfE’s evidence along with season ticket loans, any health benefits and car allowances to teachers in teaching schools or providing ITT support that have to travel between schools.

None of these extra payments can hide the fact that the teachers’ contract looks increasingly out of line with modern day employment practices. As I pointed out last year, Labour’s idea of more bank holidays might have placed some of the new dates within school holidays so that teachers and others employed in schools wouldn’t have seen any benefit. Regular surveys and diary studies have shown that teachers work very hard during the time children are in school and aren’t paid for that overtime. Should it be counted against school-holidays in a more formal manner than at present in order to allow a meaningful discussion about the feeling of some in the population that teachers still enjoy long holidays?

Perhaps the STRB might want to think what their responsibility is in this debate? Do they need to wait to be asked or can they discuss the issue as part of their consideration of recruitment and retention issues? There is lots of evidence for the OECD about teachers working patterns around the world. The issue has resonance because of the growing appreciation that more provision should be made for teachers’ professional development. Adding CPD to the existing workload without considering what might disappear to allow for the extra study would not really be very helpful.

 

Thin gruel

With not much cash to give away plus an increasing school population to fund over the next few years, schools and education were always going to have to whistle for much more than a few handouts from the Chancellor’s budget. Especially after more than three-quarters of a billion pounds had been guaranteed to win the battle with Labour for the undergraduate student vote.

So, as predicted here over the weekend, re-training for 8,000 IT teachers was one of the education headlines. How the money is to be spent will affect recruitment from September 2018, with the bulk of the cash being spent between September 2019 and the summer of 2020. £85 million, not the £100million mentioned over the weekend, has been included in the Treasury Red Book. The mathematics bonus won’t come into effect until autumn 2019 and is so arranged that it is of no help to the funds of 11-16 schools. I wonder whether it will be paid on registrations or numbers taking and passing examinations, in which case it won’t be paid until the summer of 2021. The devil will be in the detail, but don’t start spending the cash anytime soon.

The other proposals for maths schools look embryonic and a bit last minute. The CPD bonus for some teachers is interesting, but will only buy around 3-4 days of input, unless some special deals can be arranged. If cover has to be included as well, then it will not even buy that amount of professional development: perhaps it will be on-line in a teacher’s spare time. In that case, will the teacher associations veto involvement as it would be seen as adding to a teacher’s workload? Will teaching schools; MATs; providers or the private sector administer the Scheme?

Personally, I would have placed an emphasis on adding to the maths knowledge and skills of primary school teachers where I think this extra money could have achieved the most good. But, at this level of funding it looks like mere window dressing whatever use is made of it.

The real disappointment is the lack of any further increase in school funding. I am surprised the Chancellor didn’t mention the School Vacancy Service as a means of saving school’s money: missed a trick there. Perhaps he didn’t believe that the ‘fingers crossed’ reference by the Permanent Secretary at The Public Accounts Committee was a strong enough commitment to actually achieving something really workable in 2018. Not to worry, TeachVac’s free service to schools and teachers is already doing the job for the government and at no cost to the Exchequer.

The lack of progress on pay needs to be remedied by an early Pay Review Report, because when the budget was in the spring it was late in the recruitment season for announcements to affect decision-making by teachers. A November budget may well prompt teachers ahead of the 2018 recruitment round to consider their future career moves. My advice to head teachers is to dust off the rules about recruitment and retention allowances as they offer a way around the pay problems for schools that have the cash.

 

 

Shifting sands

The news that the public sector pay cap is effectively dead in the water should come as helpful news for schools facing recruitment issues. I have already suggested that the use of recruitment and retention allowances could be a way around the present pay cap as it was in previous times of recruitment difficulty. Such measures are often unfair on teachers already at the school, but they also recognise the additional costs of taking up a first job or a new position in a different area.

Of course, the cost of these measures, as I suspect with the relaxing of the pay cap, will no doubt have to come from existing school budgets. I don’t see the government offering large amounts of additional funds to schools when the pupil population is on the rise and that increase has to be paid for regardless of whatever else happens. This may mean larger classes; fewer small optional subjects and the continued encouragement of older and more expensive teachers to consider early retirement so that they can be replaced by younger cheaper teachers that no longer need a guaranteed annual salary increase.  I don’t think the Teacher Supply modelling process has taken this last factor into account and it may be partly why demand has outstripped supply in some subjects.

This blog was one of the first to catch on to the penal management fee the government has inflicted on those with student loans from this month. So, it is also good news that over the weekend there has been suggestions that the government will look again at the 3.1% rate. I hope that they will bring it into line with management fees on other financial products. Even so, many families might still find extending the mortgage on the family home a cheaper option that taking out a student loan.

Reintroducing maintenance grants for those from low income families attending university is also a sensible suggestion. Far more sensible that Labour’s idea of abolishing fees and paying for the university education of those young people whose families have been happy to pay for their education up to that point in time. I know the issue that post eighteen they are adults, but as the recent NUS Report on FE launched by Vince Cable showed, there are more deserving areas of limited government funding than paying for those that have not needed or wanted to use the State for education up to the point of entry into higher education.

The other area the government needs to reconsider is the funding of trainee teachers. The lack of any coherent policy between Teach First, School Direct and SCITTs and university courses is damaging to recruitment. A common policy of fees paid by the government and a training bursary for all graduates is both clear and coherent and worked well after 2002 when it became government policy. It has no more deadweight funding attached to it than any other government employment area where new entrants are paid a proper salary during their training period. The Treasury should be reminded of that fact. It is just that the numbers are so large.  However, cutting wastage through better retention of new teachers means that the scheme could even be self-financing if trainee numbers could be significantly reduced over time.

Top salaries in higher education

In 1995 the National Audit Office prepared a report for the Public Accounts Committee on severance payments in the publicly funded education sector after a furlough about the size of such payments. The current debate about the salaries paid to vice chancellors has an echo of the earlier concern with the methods used at the time to fund severance payments to top staff in our universities. Of course, as with most companies, there are now better governance arrangements and independent remuneration committees, designed to prevent the very political row that is currently underway about how much vice chancellors should be paid?

The business case is probably along the lines of that in order to attract top quality leaders you need to pay top salaries competitive with other parts of the world. This argument has been used by UK plc companies for many years, so the business people on remuneration committees can hardly object if university leaders advance the same argument in an increasingly global marketplace for higher education. There is also another argument that by becoming a vice chancellor you may forgo the success in your academic field, whether a possible Nobel or similar prize; a top selling text book or even just the satisfaction of teaching and research in your chosen field.

The alternative view that nobody in public service should be paid more than the Prime Minister usually ignores the non-salary benefits of a house in London and in the country and a non-contributable final salary pension that make up the total remuneration package of the leader of the government and just concentrate on the basic salary.

Where vice chancellors have probably made a mistake over the past few years of pay restraint is not to adhere to the same level of salary growth as the rest of their staff. If you are going to widen the differentials you need a cast iron public relations exercise in advance; to do so after the event always looks defensive and self-serving. Any head of human relations that doesn’t make that point clear probably isn’t reading the runes correctly.  Just saying the job is harder or more demanding isn’t enough?

The same is true for Multi-Academy Trusts where salaries of chief officers have risen over recent years, as I pointed out in a previous post ‘What is a CEO worth’ some time ago. The contrast between the pay of the chief executives of two of the larger MATs is around a couple of hundred thousand pounds. Is one underpaid?

The really interesting point with the university vice chancellors’ pay story is, however, that this time around, unlike in the 1990s, Ministers haven’t sought to pass the issue to the NAO and then the PAC, but have waded in directly. I assume that they see this as a way of diverting attention from other more concerning issues and putting the government on the side of the lecturers. Realistically, they are trying to close a stable door sometime after the horse has bolted and are only likely to catch universities that hadn’t adjusted their VCs pay to market conditions. Perhaps there should be performance related pay for senior university staff, but as large institutions they probably have to pay the heads of their professional service department competitive salaries and would you want the chief finance officer paid more than the vice chancellor? An interesting question.

 

 

Confusion over future pay

The confusion over the future of the public sector 1% pay cap that apparently highlighted differences between the Treasury and other ministers yesterday is but one symptom of the malaise at the heart of the present government. We are used to hearing of –U- turns, but what do we call a double reversal of intent since the term spin has already been appropriated in the political landscape?

Nevertheless, it is clear that pay and associated conditions of service for teachers cannot for ever avoid the effects of competition in a labour market while we live in a society where the State doesn’t direct the job you have to take.

While the labour market remains buoyant, and especially the graduate labour market, it does seem inevitable that any ceiling on pay will have adverse effects. Later today, the June data on recruitment to teacher preparation courses starting this autumn will be published and that will be another straw in the wind. Regular readers will know that I don’t expect the data to be very encouraging in terms of meeting the government’s modelling over numbers needed to be recruited.

Eventually, the pay cap in education will have to go. The government can fudge the change by making changes to the overall structure through, for instance, initiatives such as loan forgiveness schemes that reduce a new entrant’s monthly outgoings by taking over their student debt. However, that won’t help older teachers and encouraging experienced teachers to remain in the profession may be as important as attracting new entrants, if you want a balanced age profile in the profession reflecting both experience and new ideas.

Then there is the question of regional pay. Should London pay rates go up faster than those elsewhere in the country because the London area is where the problem of recruitment is most severe? The data in a previous post about percentages of unqualified teachers might support this thesis, but it could also be down to academies in London looking for a different mix of skills not adequately provided by the subjects identified in the Teacher Supply Model? Should we pay more to secondary school teachers than those that work in primary schools? Traditionally that hasn’t been the case and there seems little evidence that freeing academies form national pay rates has altered the pay landscape very much, except in one specific area.

Senior staff pay in schools, as much as elsewhere in society, doesn’t seem to have been subject to the same degree of pay restraint as classroom teachers have experienced over the past decade. I don’t buy the view that adding one or two schools to a Multi Academy Trust requires the Chief Executive to receive a pay rise to compensate for extra responsibilities.

Since academies are national schools, the government should look at whether chief officer pay in MATs is governed by any specific restrictions and whether there is at least a moral obligation to follow the government’s line on pay restraint while it is still in force.

Perhaps a learned body or a university research team could produce some pay guidelines for chief officers of MATs that relate their pay and conditions to those of chief officers in local authority Children’s Services? They might even be included in the Top Salaries Review Body since these staff in MATs are paid from government funds.

 

 

How rich are teachers?

With the details of the 2016 School Workforce Survey still awaited, we have to turn to data on salaries from the 2015 Survey, effectively reflecting pay during the 2014-15 school-year. Using the published data from the DfE, it looks as if some 8,700 of the 484,000 teachers, where the State pays their salary and the figure was disclosed, earned more than £70,000 at the reporting point. This is the figure that makes you rich if Labour is to be believed. In total that represents just 2% of the teacher workforce. However, we cannot know how many of the 22,900 with unknown salaries, earn more than £70,000. But, since over half of those where the salary was unknown were younger than 30, they are unlikely to be amongst the highest paid teachers.

By contrast to the top 2%, some two thirds of employed teachers earned less than £40,000 at the census date in 2015. They are unlikely to have seen much of a pay rise since then. The top 2% earning more than £70,000 include teachers working in London, as the summary data takes no account of the extra salary paid to teachers working in the capital; presumably because of higher costs, especially housing. It was interesting that Labour when making the announcement about taxation didn’t have anything to say about workers in London. Presumably Labour believes you are still rich in London if you earn £70,000?

Of course, pay is a crude measure of rewards, as Labour found with its pay policies in the 1970s. Too draconian an anti-high pay regime and employers turn to non-monetary benefits. The cult of the company car owes a lot to pay policies in the 1970s, a period when teachers’ non-monetary benefits came to be seriously eroded compared with those of other workers.

Public sector pay, including that for teachers, may well become an issue in the general election campaign once everyone has decided where they stand on Europe and the Tories hard BREXIT stance. I suspect many voters already know how that issue will influence their voting, especially where there are local elections and it has already been discussed on the doorsteps, as it has in my part of Oxford. Voters will want something else to talk about over the next seven weeks.

The issue is whether the many young teachers, increasingly saddled with big student loan debts and trying to build their lives, feel well off? I suspect most don’t, especially in high cost areas outside of London, of which Oxford is one. How much of the increase in jobs for teachers is due to large numbers quitting the profession: we don’t know, but with other opportunities on offer why wouldn’t you, especially if workload and low morale are affecting how you see your job.

Perhaps the political party offering most on improving workload, CPD and morale might win the teachers’ vote this time around. Here’s what the 2015 Lib Dem offer was in 2015:

Guarantee all teachers in state-funded schools will be fully qualified or working towards Qualified Teacher Status (QTS) from September 2016

  • Introduce a clear and properly funded entitlement to professional development for all teachers
  • Raise the bar for entry to the profession, requiring a B grade minimum in GCSE maths and English
  • Establish a new profession-led Royal College of Teachers, eventually to oversee QTS and professional development.
  • Continue to support the Teach First programme
  • Establish a new National Leadership Institute

So certainly room for more this time around, especially on workload pressure; retaining teachers in the classroom and making everyone working in education feel properly valued as a public servant.

Readers are reminded that for the past four years I have been the Lib Dem spokesperson on education on Oxfordshire County Council.