Is the Teachers’ Pay Award fully funded or not?

Earlier this week, the Secretary of State wrote to the National Education Union(NEU)  about funding for the Teachers Pay Settlement. I cannot find the text of the letter on the DfE’s website, but the NEU helpfully stated that:

The NEU has secured through negotiations with the Secretary of State for Education a fully funded pay increase for all teachers throughout England. This is a significant step. In a letter to the General Secretary of the NEU Lucy Powell outlined her proposals for funding alongside a willingness to address issues around accountability, workload, and well-being. NEU secures from Government full funding for teacher pay offer | National Education Union

Since then, doubts have been cast upon whether there is enough money for a ‘fully funded’ pay rise for all teachers. Given that the NEU was considering industrial action over pay, this statement looked like a real win for the Union.

However, this announcement was never likely to create produce a ‘fully funded’ pay increase because of the manner in which the National Funding Formula for schools operates. Schools have different mixes of staff salaries, some have many inexperienced teachers near the bottom of the main scale, whereas other schools have many long-serving teachers at the top of the Upper Pay Spine. Schools also differ in how they reward additional activities with Teaching and Learning responsibility points (TLRs). The Formula cannot take these differences into account.

Asa result, some schools would be more than fully funded and other left still needing to find the rest of the pay award.

Subsequently, it seems that the DfE assumed that the funding for the pay award will come for the saving schools experience as a result of the reduction in the employer’s contribution to the non-teaching staff pension scheme: the LGPS. That seems like wishful thinking to many commentators, including myself.

First there are a number of LGPS Pools, with different outcomes, and hence different rates of employer contribution. As a result, a school with a high percentage of staff at the top of the Upper Pay Spine, few support staff and located in an LGPS fund with one of the higher contribution rates will fare far less well  from this announcement than a school with the opposite profile.

Also, making an announcement in September mean that every school budget is already set, and the only spare cash is in any ‘contingency’ line on the budget. The DfE should know that fact. As a result, this announcement looks like either something of a face-saving act or another of the Labour government’s gross miscalculations. Either way, it seems likely many schools, if not most, will have given only a faint cheer on hearing the announcement, if they managed to raise a cheer at all.

I am told that the DfE clawed back the savings from reductions in employers’ contributions to the Teachers Pension Scheme. Unlike LGPS, where there are real schemes, with investments than can go up and down, the TPS, like the Civil Service Pension Fund, doesn’t actually exist as a fund, but is held by The Treasury as a notional fund.

Are there savings to be made in education?

One of the tasks faced by someone no longer a councillor is to dispose of the vast accumulation of papers and reports collected over the years. While doing so it is possible to come across long forgotten articles. One such was an article that I wrote for the TES in their edition of 17th September 2010 that was headed ‘how to cut millions of pounds without harming the chalk face’.  Well, I suppose that ought to be the interactive whiteboard these days rather than the chalk face.

How relevant today are the suggestions I made at the end of a period when the Labour government led by Gordon Brown has favoured spending on education?

Back then, at a time when rolls were rising in primary schools, but still falling in the secondary sector: the opposite of the current situation, I focused firstly on the pension scheme and the cost of allowing private schools to be members of the teachers’ pension fund. I warned that uncapped salaries could risk bankrupting the scheme if there was either no cap on salaries or contributions didn’t rise.

In the event, the decision was taken to increase contributions and to ensure new entrants were on average salaries for their pensions rather than the more expensive final salary scheme previously available. However, the scheme is still massively expensive, especially as many pensioners are living longer. (note as a recipient of a public sector pension, I have an interest in anything the government does to public sector pensions).

My second suggestion was to reform teacher training to a more school-based system that required secondary schools only to train for the staff that they would need. In a period of falling rolls, it is easy for the DfE’s Teacher Supply Model that uses historical data to calculate the number of teachers needed to overestimate the needs of schools to recruit teachers. With a period of falling rolls currently facing schools, this is certainly an area where discussion might be helpful, especially after the recent announcement of more training places for graduate apprenticeships. Wasting training places, either for teachers that cannot find a teaching post in England or that start work in the private school sector, can lead to a mis-direction of funds.

Allied to the previous point of training, in 2010, I highlighted the issue of redundancies, and whether a system should be employed whereby all vacancies on offer by all state-funded schools should first be offered to those teachers facing redundancy: otherwise, the cost of redundancy payments for teachers that might then walk into another teaching post was a waste of money. How to handle the labour market for teachers during a period of falling rolls is something the DfE might still need to consider.

My concluding point related to Labour’s flagship projects. Of course, the one of those that mushroomed under the Conservative governments was the creation of Multi-Academy Trusts, each with its own chief officer and backroom staff. In Oxfordshire, there are around 20 MATs. Reducing that to say, five, could reduce central office costs, and allow the cash saved to be diverted into in-service training, and the recreation of an advisory and inspection service to stand between schools and ofsted, as well as identifying the future leaders of our schools, something the present system does not always do well. Saving just ten MAT CEO posts at £150,00 each might save around £2 million a year after on-costs have been taken into consideration.

Where there are falling rolls, unless overheads are reduced, the cash available for teaching and learning will undoubtedly be reduced in a period where the demands on government spending for areas such as defence and policing are uppermost in the mind of a government that doesn’t want to raise taxes, and thus may struggle to find extra cash for schooling.