College senior pay sign-off threshold raised to £174k

Colleges can now pay bosses up to £174,000 before needing approval from the government.

Governors were previously required to apply for approval from the Department for Education and the Treasury for senior salaries over £150,000.

In updated guidance published today, FE colleges wanting to advertise salaries above £174,000 will need sign-off.

The government has also increased the level bonuses need to be approved from £17,500 to £25,000.

The new rules will only be applicable to roles that have not previously had HM Treasury and DfE approval.

Approval for high paid college leaders has been in place since colleges were reclassified into the private sector in November 2022.

DfE’s guidance also said: “New approval does not need to be sought if the role has had previous approval from HMT [Treasury] and the total remuneration and performance related pay are the same or below what the incumbent receives, or involves an increase of no more than 2 per cent, and the previous HMT approval placed no conditions on the incumbent or subsequent recruitments.”

It comes after FE Week revealed last year that colleges were experiencing “unacceptable” lengthy delays from getting salary approval, which was impacting senior recruitment processes.

The guidance added that “for planning purposes” colleges should allow a minimum of two months to hear back on an approval decision.

Nearly 60 principals would now no longer be in scope for the approval.

According to the government’s latest college accounts documents for 2023-24, 57 college accounting officers earned between £151,000 and £174,000 a year.

Additionally, only two principals were awarded bonuses of more that £17,000 that academic year – Activate Learning and Burton and South Derbyshire.

The new guidance is effective from June 26.