My Lords, we are one of the first countries in the world to require all large employers to publish their gender pay gap and bonus data. Reporting will help to shine a light on where women are being held back and where employers can take action to support their whole workforce. These figures will mean that academy trusts, as with all other large employers, can start to analyse the data and take action to close the gap.
I thank the Minister for that helpful and important reply. In answer to a Written Question that I put to him about the gender pay gap he said:
“Academy trusts are free to set their own salaries”.
This is of course taxpayers’ money, and when in 471 multi- academy trusts the median pay gap was 31.7%, that is not a proper use of taxpayers’ money. Where some chief executives of multiacademy trusts now earn upwards of £400,000 a year, that is not a proper use of taxpayers’ money. Surely it is time for the Government to use their financial clout and to realise that with trust comes responsibility.
My Lords, the noble Lord, Lord Storey, is correct that academy pay is set by the trusts themselves. However, we have taken action on high-end pay. One of the first things I did when I took on this job in September was to ask officials to write to 29 single-academy trusts where there was high pay. Since then, we have resolved that 16 of them no longer pay the levels that were indicated in their returns. We have now also written to a number of multiacademy trusts, and in the last couple of weeks we have written to all trusts which pay more than £100,000 or which have more than two people in their trust who are paid more than £100,000. So we are alert to it, I am bearing down on it where we see excesses, and I will continue to do so.
My Lords, we have known for some time that senior pay in multiacademy trusts is out of control. Now we have evidence that, as the noble Lord, Lord Storey, said, women working in academy chains suffer some of the worst gender pay gaps. Is this not public funding, which is being used to entrench inequality in the education system? I have to say that the Minister is personally associated with this issue. The website for the Inspiration Trust, which runs 14 academies in East Anglia, lists him as a trustee and a person with significant control. Noble Lords may wonder why, seven months after being appointed as an Education Minister, he is allowed to continue to hold those posts. But for now, can the Minister say that, despite the fact that trusts have the right to set their own salaries, the size of those gender pay gaps is a scandal, and are he and his department prepared to give advice to trusts to begin to close those gaps?
My Lords, perhaps I should address the Inspiration Trust first, as I was indeed its founder. The chief executive took on 14 schools, seven of which were in special measures when we took them on. All are now out of special measures. Thousands of children are getting a better education than they were five years ago, and that is the essence of what autonomy of pay is all about. Where we have excess pay and there is poor performance, as I said to the noble Lord, Lord Storey, I am bearing down on that. No one is more messianic about the misallocation of taxpayers’ money, but we need to strike a balance between autonomy, where good teachers and good leaders are given the chance to develop and improve schools, and those who are not good are held to account.
My Lords, how does the Minister think that some of the questions that we have heard so far address the gender pay gap? I believe that the gender pay gap in academy schools—I declare my interest, having been a chair of two and currently a trustee of one—is associated with the subjects that each gender teaches; in other words, people who teach physics are traditionally paid significantly more than those who teach arts. That shows that we undervalue some subjects in these schools.
My Lords, unfortunately there is a market in different skills and professions. We know that we have a shortage of good physics teachers, and in order to bring physics teachers into the profession we need to offer additional incentives. However, looking more broadly across the gender pay gap, academies do not look as bad as people might suggest. For example, while in the top quartile men occupy 23% of the total workforce but have 32% of the jobs, the situation in the middle quartile is almost even, with men occupying 23% of the workforce and only 25% of them having upper-middle jobs. Therefore, I think that we are seeing great progress on this. It is also worth pointing out more generally that in 1997 the gender pay gap stood at 17.4%. Today, it has been reduced to 9.1%. I do not suggest that that is enough but it shows that we are making progress across our economy.
My Lords, I am a director and a trustee. I stood down as the chairman. That matter was discussed with the Propriety and Ethics Team in the Cabinet Office. It was fully disclosed and is in my ministerial declaration.
My Lords, will my noble friend accept congratulations from the House for the work he has done in enabling children’s education to be improved? Can he get one of his excellent teachers to perhaps teach the noble Lord, Lord Watson of Invergowrie, the difference between pay inequality and the gender pay gap? Is it not the case that men and women doing the same job in schools are paid on the same basis, and the gender pay gap is about the relative numbers of men and women in particular jobs? That is something which, from his question, it seems the opposition spokesman did not understand.
My Lords, my noble friend is quite correct. It is not about any disparity between a man and a woman doing a job—that was outlawed in this country 40 years ago. I take my noble friend’s thanks for the achievements of the Inspiration Trust. Most of the credit must go to my chief executive, who is a woman—Dame Rachel de Souza. We have other exceptional women running trusts: Lucy Heller of ARK and Maura Regan of the Carmel Education Trust. Indeed, at the primary level, 65% of head teachers are women, which shows that there is every opportunity for women in the education system.
My Lords, I am very grateful to the Minister for the very helpful answers that he has given my noble friend Lord Storey and others. However, is not the real problem here that disproportionately high pay is being channelled up to a tiny number of male-dominated posts at rates far higher than the local authority-run schools can pay? How does the Minister justify that, especially to the 74% of the teaching profession who are hard-working, highly professional women?
The noble Baroness asks a very interesting question. The pay in maintained and academy schools is actually very close. For example, the data to November 2016 shows that a maintained secondary school head teacher earned £88,300, compared to an academy secondary school head teacher who earned £92,500. However, the maintained head teacher had a 1% increase in that year, whereas the academy head teacher had a 0.4% decrease. In the primary sector, the comparisons are even closer, at £62,400 for a local authority school and £65,500 for an academy. I do not accept that money is being drawn up to mostly male teachers. As I mentioned in my earlier answer, 65% of primary heads are women. If we look at the starting pay for teachers, we see that, for a graduate teacher between the ages of 21 and 30, the average pay is £27,000, compared to £25,000 for all graduates. That does not include the very generous pension scheme that exists in the teaching profession, which has a 16.4% contribution and is underwritten by the Treasury.