Pay Flexibilities for School Principals and Vice-Principals

16 November 2000

The Assembly's independent auditor, Mr John Dowdall, has today published a report on the operation of pay flexibilities for school principals and vice-principals. Focusing on the extent to which Boards of Governors have used the discretion they have to move principals and vice-principals up the salary spine in a fair and equitable manner, Northern Ireland's Comptroller and Auditor General reports that:

The vast majority of principals and vice-principals do not progress up the salary scale on an annual basis. Where pay flexibility is used Boards of Governors must have regard to the statutory criteria covering the responsibilities of the post, the socio-economic circumstances of the school, any difficulty in filling the post, and the post holder's performance. However, the Audit Office found that, in a significant proportion of the cases which it examined, Boards of Governors needed to demonstrate with greater clarity that salary awards met these requirements; and
The Department of Education and the Education and Library Boards should give more attention to overseeing and controlling the pay process for principals and vice-principals in order to assure themselves that increases are reasonable and consistent.

Background

There are about 1,300 schools in Northern Ireland, each with a principal and most with at least one vice-principal. Annual expenditure on the salaries of principals and vice-principals was around £86 million in 1998-99.

In 1993 the Department of Education introduced a degree of flexibility into the pay of school principals and vice-principals in recognition of the fact that their responsibilities and performance will vary from school to school. This flexibility enables each Board of Governors to decide appropriate salary levels, within a national framework, to meet its school's own circumstances. Since 1997, school governors have been required to actively review the performance of principals and vice-principals against previously agreed targets before a discretionary pay award can be made and to ensure that such awards are determined in a fair and equitable manner.

Main Findings

On Compliance with Guidance by Schools (Part 2 of the Report)

The Audit Office calculated that, in monetary terms, the introduction of flexibility has resulted in a 1998-99 pay bill for principals and vice-principals of £1.4 million more than it would have been had the previous pay system continued. The Department expressed its reservations about the prominence given to the inclusion of the £1.4 million figure given that a policy designed to provide rewards was bound to incur additional expenditure. It told us that that, in 1998-99, actual salary increases awarded to principals and vice-principals amounted to approximately £0.4 million of which £140,000 amounted to discretionary awards (paragraphs 2.4 to 2.6).

Clearly, an effective principal is crucial to a school's success and pay arrangements for principals should reflect the importance of their role and allow the most successful principals to earn more. However, unless salary increases awarded by Governors are clearly linked to pre-determined and measurable criteria, in line with the relevant guidance, unwarranted awards may be made (paragraphs 2.12 and 2.13).

The Audit Office examined 15 cases where a governing body made an award above the maximum recommended for a particular school grouping. While eight of the 15 cases were satisfactory, we found that in seven cases, no papers were available in relation to the salary increase awarded (paragraph 2.11).

In addition, we surveyed a sample of 50 schools where salary increases had been awarded during 1997-98. While the majority of these schools had updated their salary policies to incorporate performance criteria, we found that:

there was only limited evidence of schools attempting to develop quantifiable criteria against which to judge the performance of principals and vice-principals and what this was likely to mean in salary terms (paragraphs 2.19 and 2.20); and
the process of discussing and awarding salary increases to principals and vice-principals appeared to be less than rigorous in many cases. (paragraph 2.23).

The Audit Office recommends that all Governing Bodies should ensure that they have in place meaningful and measurable indicators against which they can measure the performance of their principals and vice-principals. The evidence from our survey of schools indicates that the comparatively new responsibilities on Governing Bodies to set clear and measurable performance criteria may not be fully understood in all cases. We note that, in 1993, the Boards issued guidance and offered training seminars and that further detailed guidance was issued in 1997 and updated this year. In this context we recommend that the Education and Library Boards should continue to co-ordinate the kind of assistance Governors need to develop their role of appraising the performance of principals and vice-principals and deciding on their remuneration (paragraphs 2.21, 2.22, 2.25 and 2.26).

On Monitoring Arrangements (Part 3 of the Report)

The Boards (in the case of the controlled sector) and Council for Catholic Maintained Schools (in the case of the maintained sector) are the employing authorities for schools. As such, they are under a duty to act on the decisions of Governors regarding the salaries of principals and vice-principals subject to decisions conforming with legislative requirements and the rules for the control and management of school expenditure. Where it appears to a Board that a salary increase is inappropriate, it will write to the school in question and point out its concerns. If the Governors remain of the view that the salary increase can be justified in terms of the proper use of public money, in reality the Board has no power to stop or amend the increase (paragraphs 1.11, 3.3 and 3.6).

While NIAO acknowledges that there may not be a direct link between pay increases and teacher redundancies the following case examples illustrate the kind of scenarios that can arise in the awarding of salary increases to principals and vice-principals (paragraph 3.8):

In 1996 the principal of a controlled secondary school was awarded an increase of one point, which put him 9 points above the recommended point for the school. In the same year, the school had experienced two teacher redundancies and a budget deficit. In the subsequent year, three further redundancies were required because of an increased deficit.
In implementing the pay spine which became effective from September 1999, the Governors of a controlled secondary school recommended that the principal should be assimilated onto a point above the range applicable to the size and circumstances of the school. This resulted in a salary increase in excess of £7,300. At the same time the Governors proposed to reduce the school's teaching staff.

In challenging increased salary awards the Boards told us that, in many instances, it was not possible to verify their validity because clear, pre-determined and measurable criteria had not always been established for principals and vice-principals. Moreover, the Boards indicated to us that, in some cases, they had not been notified of pay awards until after increases had been put into payment by the Department of Education. From February 2000 a new form was introduced for Governors to notify the Department of salary increases awarded to principals and vice-principals, which is sent to the relevant employing authority to strengthen controls (paragraph 3.10 and 3.13).

It is NIAO's view that, the accountability arrangements in place to ensure reasonableness and consistency of pay awards to principals and vice-principals need to be tightened further. In order to inject greater accountability into the process of pay awards for principals and vice-principals, we consider that there is a need for greater oversight and control by the Department and the Boards if they are to assure themselves that there is consistency and reasonableness in salary increases (paragraphs 3.12 and 3.15).