Changes to Senior Pay Controls for Colleges: What You Need to Know
When colleges, which includes further education colleges, sixth form colleges and institutions designated under the Further and Higher Education Act 1992 and their subsidiaries, were classified as central government bodies, one of the key changes was that colleges would be subject to senior pay controls where pay met or exceeded the threshold as set out in the Treasury guidance.
Published: September 10th, 2025
4 min read
On 10 July 2025 the Department for Education (DfE) published updated guidance on senior pay controls for colleges, marking a significant shift in how high-level renumeration is managed across the sector.
The guidance helps colleges understand:
When and how to seek approval from the DfE and HM Treasury (HMT) for senior pay arrangements; and
What considerations must be addressed before submitting an application.
Key Changes: New Thresholds
A major update to the guidance is the increase in threshold levels over which colleges must seek approval from the Chief Secretary to the Treasury (CST) for senior pay. From June 2025, any new appointment will require approval if the total remuneration package exceeds the defined threshold of £174,000 (or the pro-rata equivalent for part-time staff) or the performance related pay (bonus) arrangements exceed the threshold of £25,000.
These changes mark a substantial revision of the senior pay control process and are designed to provide greater flexibility for colleges, while still ensuring that high-level pay awards are subject to the necessary scrutiny. The new thresholds apply specifically to new appointments, not to existing posts or renewals that have been previously approved by DfE and HMT.
For existing staff whose remuneration exceeds the threshold DfE approval is required for pay increases of above 6% (subject to paragraphs 2.10 to 2.13 of the HMT guidance).
The key changes are outlined in the below table.
Scenario | Threshold | Approval?
|
New appointment on or after 26th June 2025 – total renumeration
| Exceeds £174,000 (or the pro-rata equivalent)
| Yes – Approval needed from DfE and HMT
|
Performance - related pay | Exceeds £25,000 | Yes – Approval needed from DfE and HMT
|
Existing role – salary increase of over 6%
| If above threshold | Yes – Approval needed from DfE and HMT
|
Existing role – salary increase of over 6% previously under threshold
| If the increase takes pay above threshold
| Yes – Approval needed from DfE and HMT
|
|
|
|
What does this mean for colleges?
This requirement for colleges to notify DfE and HMT on senior pay is nothing new. This obligation has been in place since colleges were reclassified into the central government sector in November 2022.
The rise in the threshold to £174,000 for total remuneration and £25,000 for performance-related pay reflects the DfE’s recognition of the current economic and employment climate within the further education sector. This means that fewer colleges will be required to seek approval from the DfE and HMT on their senior pay packages, allowing more flexibility in colleges’ leadership recruitment and retention.
However, for those colleges and institutions whereby the senior pay proposals still exceed the new thresholds, it is important to understand that the approval process remains stringent. The DfE have now advised colleges to allow a minimum of two months for clearance decisions. Therefore, colleges must be proactive in incorporating this timeline into their recruitment and renumeration planning to avoid delays in appointing senior leaders.
This update provides some welcomed breathing space for colleges across the country. By raising the thresholds for senior pay approval, the government has acknowledged the real-world challenges colleges face when attracting and retaining top leadership talent. This is good news for HR teams and senior leaders as there is now more flexibility when determining pay and performance related pay awards.
For further information please contact Catherine Hare
