School finances are expected to come under renewed pressure as schools meet Labour’s 3.5 per cent teacher pay award, despite earlier suggestions that the increase would be fully funded, union leaders have warned.
Education Secretary Lucy Powell is facing opposition from the NASUWT, which says the award remains underfunded and could force schools to reduce classroom provision.
The dispute follows a letter Mrs Powell sent to the NEU in an effort to prevent planned strike action, arguing that savings from support staff pensions could help cover the increase.
She said £500 million generated by reassessing support staff pension arrangements would not be “clawed back”, allowing schools to meet the cost of the pay rise.
“We are confident that schools will be able to cover the costs of the teacher pay award,” Mrs Powell wrote.
Daniel Kebede, general secretary of the NEU, described the development as a victory at the time, saying it meant the pay award would be “fully funded”.
The NASUWT has since challenged that interpretation, insisting that schools still need to find £500 million.
The union argues that the pension savings cited by Mrs Powell were announced months earlier and have already been included in school budgets for other purposes.
School budgets are expected to face pressure from Labour’s 3.5 per cent teacher pay award, despite earlier suggestions that it would be fully funded. Pictured: Education Secretary Lucy Powell
Without additional funding, the shortfall could ultimately lead to staff reductions, the NASUWT fears.
Matt Wrack, the NASUWT’s general secretary, said: “A pay rise that isn’t fully funded simply leads to cuts in school budgets and is yet another attack on children’s education.
“Despite all the spin, there is no new money for schools and the underfunding crisis remains.
“We don’t believe the Government can try and spin its way out of a gap in funding.
“Our members deserve honesty from the Department for Education because at the moment there is concern and confusion in schools, with mixed messages coming from ministers.
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“If Lucy Powell believes schools can fund this pay award from existing budgets, she needs to explain to the profession which services she expects schools to cut.”
Mr Wrack wrote to Mrs Powell last week, saying employers “have been aware of the new rates for some time and have already built this into financial planning”.
The 3.5 per cent increase for the current year was initially expected to be part-funded by the Treasury, with schools required to find 1 per cent from their own budgets.
The NEU then threatened nationwide strike action unless the Government agreed to cover the remaining cost.
Education Secretary Lucy Powell is facing a dispute with the NASUWT, which says the teacher pay rise remains underfunded and could lead to classroom cuts. Pictured: NASUWT General Secretary Matt Wrack
Mrs Powell’s announcement about the pension savings last month was initially seen as resolving the funding dispute.
Today, shadow education secretary Laura Trott said on X of the latest row: ‘When other parties hailed this smoke and mirrors pay rise as a victory for teachers, we didn’t.
‘It is not new money for schools. It doesn’t reflect the reality schools are facing. We said from the start that this deal was not good enough.’
However, a Government source denied there was spin and stressed it had been ‘factual and clear’ that there was no new money.
A DfE spokesman said: ‘The pay award remains the same. What has changed is the affordability position following the recent valuation of the Local Government Pension Scheme, which has reduced schools’ costs and strengthened schools’ ability to meet the costs of the award.
‘This represents a substantial improvement in schools’ financial position for this year – helping them meet the costs of teacher pay.’
They added: ‘Supporting the whole school workforce remains a priority for this Government, and the recent pay awards and funding will benefit teachers, teaching assistants and support staff alike.
‘The recent Local Government Pension Scheme valuation reduces what schools have to pay into the scheme as employers, but it does not reduce the pension benefits support staff receive. This has the overall effect of supporting the whole school budget.’
