For my sins, I’ve worked in education for a while now, and there have been many occasions during my career when I’ve experienced a sense of déjà vu.
Stay in schools long enough, and you’ll start to recognise how numerous ‘new’ decisions and policies merely shadow existing or previous approaches – the latest being the government’s current funding models and decisions on spending. So what’s brought on my déjà vu this time?
In the last two years there have been some significant increases in the staff-related costs borne by school budgets, mainly national salary changes and some sector-specific overheads. These cost increases apply nationally, and have had to be mostly absorbed by existing budgets, putting yet more pressure on schools’ already overstretched funding. Other industries have had to bear the same rises, but schools are unique in that their ability to generate extra income through improved output is extremely limited.
Lack of clarity
The cost increases in question include employer National Insurance contribution rises, annual increases in the minimum wage and rises in ‘the living wage’, all of which are further exacerbated by inflationary pressures. Yes, these are costs that any industry can expect to incur, but given the narrow ways in which education settings can access additional funding opportunities, you can understand why they’ve caused particular concern among school leaders.
Some of the education-specific staffing costs have been covered by additional government funding, which has, of course, been gratefully received. The downside, however, is the fact that this funding isn’t necessarily guaranteed. We’ve received assurances from government that financial assistance to cope with the cost increases will be forthcoming, but the fact that these funds won’t be distributed via traditional means – i.e. through LAs or the General Annual Grant – makes me nervous.
In the past, funding streams outside of LA and GAG allocations haven’t been sustained. We can point to Pupil Premium as perhaps an exception to this, though again, we’ve never received a guarantee that Pupil Premium will continue indefinitely. I’d point to the ongoing lack of clarity surrounding the PE and Sport Premium and universal infant free school meals as reasons for my nervousness. The uncertainty over their longevity feels very familiar to me, going back as far as the Standards Fund of the late 2000s, when ‘other’ monies were allocated for specific purposes outside of the school’s grant.
What changed last year
In 2018 the government announced significant salary increases of 3%, 2% and 1.5% for three levels of teaching staff, and confirmed that these rises would be funded through the teachers’ pay grant. The criteria on which this decision was made meant that schools were expected to fund the first 1% themselves, thus leaving some schools out of pocket. This particular grant is due to remain in place for at least this year, but it is small comfort. The decision as to where this funding will come from, moving forward, will apparently be made following the next full spending review, currently due to take place in 2020.
Chancellor Philip Hammond’s policy of ‘pay what you can afford’ has left schools with a dilemma, and given rise to an even greater disparity between schools and MATs on matters relating to teachers’ pay. Factors such as the ability to increase earnings has meant that teacher recruitment and retention at some schools could suffer and become hard to address in the event of any existing financial restraints.
The government has recognised the steady build of concerns around teacher recruitment and retention, and in January this year published its teacher recruitment and retention strategy in order provide schools with some support. In my view, however, it has to also recognise the full impact of its own pay decisions, and start seeing them as more than just a means of making the profession more financially attractive. The financial impact they have on the schools and academies where those teachers teach is very real, and must be taken into account.
What’s new this year
As of September 2019, employers’ contributions to the Teacher Pension Scheme will increase to 23.68% – a rise of 40% compared to what they were previously. The government has stated that this will be fully supported by a separate fund paid to schools during the 2019/20 funding round, There will also be a process whereby schools can submit bids for funding from a further pot if their pension costs exceed 0.05% of their budget. Yet the question remains – for how long will this financial support continue?
In April this year we saw the living wage revised to £8.21, prompting a review of the LA support staff pay model that’s largely based upon national Joint Negotiating Committee scales. The effect of this has been to increase the cost of support staff pay at many schools quite significantly – indeed, since 2017 the lower end of these scales have gone up by over 15%. There have notably been no announcements of additional funding to help with this, and it has affected schools across the board. I had one school report to me that 22% of their staff were now more than 10% more expensive to employ, all within the space of a single year.
In addition to all of that, the Local Government Pension Scheme is soon due to undergo its three-yearly cycle of actuarial valuation, which may well highlight the need for further employer and employee contributions. If it does, that will add yet more strain to our budgets that’s unlikely to be eased by any centrally-provided support.
Apply sticking plasters!
As a member of the schools funding forum for my county, I’m keenly aware of the different elements that form the backbone of school funding. The formulae that are drawn up and put in place to calculate the schools block and other areas of LA spending are mind-boggling. Academies are affected by this too. They might receive their funding direct from the Education Funding Agency, but the situation they face is similar. Making up for shortfalls by placing additional funding in grants that sit outside established funding structures does little for transparency. Nor does it provide much reassurance that the support can be relied upon in the long term.
Moving forward, my fear is that these additional costs will be the straw that breaks the camel’s back, prompting the government to adopt a ‘sticking plaster’ approach to managing the problem. If the government’s strategy for recruiting and retaining teachers recognises that pay and conditions need to be improved, then school and academy budgets have to be increased in order to reflect this. A recognition of the fact that schools and academies aren’t able to operate without support staff of all levels should result in additional support costs being funded too.
At a time when general expectations are that the ‘books will balance’, these necessary rises in expenditure have to be matched and properly funded. Failure to do so simply isn’t an option.
Sue Birchall is a consultant, speaker, writer, trainer and business manager at The Malling School, Kent.