Colleges must justify ‘excessive’ staff pay, union demands

Colleges must justify 'excessive' staff pay, union demands

Colleges must justify staff who are paid over £150,000 a year, according to the University and College Union, which says oversight is “desperately needed”.

Seventy-one college leaders earned salaries of that size or more in 2015/16, according to FE Week analysis of DfE accounting records.

This rises to 132 (over two thirds of all colleges) when pension contributions were included.

The government is beginning to crack down on high pay for academy chief executives and university vice-chancellors.

The new Education and Skills Funding Agency boss Eileen Milner joined the universities minister Jo Johnson this week to order both types of institution, which often pay salaries of more than £150,000 a year, to justify the excessive remunerations.

They were echoing the words of the former education minister Andrew Adonis, who called in August for university heads’ pay to be capped at that amount.

Sally Hunt

Colleges have however so far not received the same scrutiny, and the Department for Education this week refused to tell FE Week whether it would request similar rationalisation from FE providers.

Sally Hunt, UCU’s general secretary, said the bumper salaries enjoyed by many principals show that “too many college leaders are out of touch” and demanded more accountability on high pay.

“While staff pay is being eroded and colleges are struggling to recruit because of low pay, these pay awards show it’s one rule for staff and another for those at the top,” she told FE Week.

“The recent scandals over pay and perks in universities show the desperate need for proper accountability of senior pay in all education institutions which receive public funding, including FE colleges.”

Geoff Barton, general secretary of the Association of School and College Leaders, said principals lead “large and complex” organisations, and it is “right” that their pay should be “commensurate with the significant level of responsibility involved in these extremely demanding roles”.

Ms Milner wrote to 29 academy trusts which have just one school, asking them to defend high salaries for their chief executives.

She said this is needed because of the “considerable scrutiny” over taxpayer-funded executive salaries that has emerged “in recent months”.

In August, Mr Johnson asked the same of vice-chancellors, after it emerged that dozens of university heads were earning £300,000, and some were on more than £400,000.

“While it is essential that we have the best people to lead our colleges if we are to raise standards, it is also important the system commands public confidence and delivers value for money,” said a DfE spokesperson.

“That is why colleges must disclose senior staff pay annually in their audited accounts. Disclosure requirements are kept under review by the ESFA.”

It is not only chief executives and principals who are being paid such exceptionally high salaries.

FE Week looked at the accounts of the colleges (see table) with the highest salary and pension packages in 2015/16, and found that more than one person was on £150,000 or more at four: NCG, Loughborough, Gateshead and Stafford.

The board of the Hart Learning Group said a “significant element” of its chief executive’s pay was based on “performance, including some long-term measures”. The group comprises North Hertfordshire College, Hart Learning and Development, and the Hart Schools Trust.

The Manchester College said the chief executive of its parent company, the LTE group, was the person receiving a pay packet of £242,000.

A spokesperson said the group is one of the UK’s largest skills social enterprises, and operates five separate organisations in over 120 locations with a combined turnover of more than £180 million in 2016.

He added that the principal of The Manchester  College earns a salary of £141,050 excluding pension contributions. 

Nevil Croston, the chair of governors at West Nottinghamshire College, said the remuneration package for principal Dame Asha Khemka is commensurate with her “skills and expertise, her profile and reputation within the sector, the significant influence she has on government policy, and the success she has brought to the organisation over the past 11 years”.

A Weston College spokesperson said: “Unlike other college groups, Weston College’s multi-academy trust accounts are consolidated within the overall college group accounts. To compare like for like, approximately £31,000 should be removed from these figures for the accounting officer work on behalf of the trust.”

FE Week did not list colleges where chief executives’ pay topped £200,000 if there were overlaps in principals or one-off severance payments.

No sign of government’s pay transparency pledge

The Department for Education has not acted on a promise once made by a former skills minister to increase pay transparency for senior management positions in colleges.

Nick Boles hinted that growing numbers of college staff were receiving excessive salaries in a review of post-16 education released in March last year.

Even though colleges have to publish what they pay senior staff every year in their audited accounts, they are not required to detail exactly how much they pay or who receives it.

Mr Boles said the DfE would explore accountability measures to publish the salaries of the three highest-paid members of college staff, to ensure value for money.

But the government appears not to have made any headway in this area in the last 20 months.

A DfE spokesperson said that senior staff pay disclosure requirements “are kept under review by the ESFA” when FE Week asked about progress on accountability.

FE Week found four colleges – NCG, Loughborough, Gateshead, and Stafford – had paid more than £150,000 in 2015/16 to more than one employee, after we combed college accounts.

NCG paid its chief executive £278,000, its group director for finance, estates and IT up to £210,000, and the principal of Newcastle College up to £160,000. These amounts included pension contributions and bonus payments.

A spokesperson pointed out that CEO Joe Docherty’s remuneration also included a car allowance. He is responsible for the whole group, which has six FE colleges and two private training providers, with a combined turnover of circa £170 million.

The NCG spokesperson added that none of the trio have received any increase in salary for the last three years.

Stafford College meanwhile paid its previous interim principal Ian Clinton £260,000, and one other unnamed interim vice-principal above £200,000 in 2015/16.

Loughborough paid £254,000 for its principal in 2015/16, but said this was because of an overlap in leadership between Esme Winch and Heather MacDonald. Another of its employees was paid up to £160,000, but the college would not be drawn on who or what role this was for.

Gateshead paid its principal Judith Doyle £244,000 and one member of its executive team up to £160,000, although a spokesperson would not reveal their identity when asked.

He did point out that senior pay is determined by the college’s remuneration committee which follows “robust governance procedures”.