Teachers Pay Rises

As we near the end of the budgeting season, with many of you already submitting your 3 year budgets to the ESFA, the government have responded the 2019 School Teachers’ Review Board (STRB) annual report.

The full STRB report can be found here and the government response in parliament here. 

Proposals
The STRB proposed that the pay and allowance range for all teachers and leaders should be uplifted by 2.75%. This would take effect from September 2019. This proposal was lower than proposed by the unions, which was 5%, but higher than that which the DfE said could be afforded by schools, as this had been set at 2%. Of course as every year, not every teacher will get the full pay rise, only those at the bottom or top of their pay scale are guaranteed the full 2.75%. 

DfE response
In parliament on the 22 July, Damian Hinds responded to the proposals, and has accepted, in full the recommendations for a 2.75% uplift. As this amount is greater than the 2% which was calculated as affordable, a further pay grant will be available. This will be an additional £105m for the sector as a whole, on top of the current £321m teachers pay grant awarded for 2019-20. 

Impact for schools
As many will have already finalised budgets and submitted to the ESFA, it will be too late to adjust your budgets that are submitted now. We would however recommend that you do update your working budgets for these changes in costs now that they are known. You can calculate the cost to the trust, and make the board and management aware of these changes and the impact on the budget. As a matter of best practice, when budgets were originally presented you may have factored in some scenario planning as to what a small change to key assumptions may mean to the budget, so you may already have a lot of this information available to hand. Many of you will have budgeted for a 2% increase in teachers pay already, as this was guidance by ASCL and expected given the DfE’s original statements. It is the additional 0.75% that will impact your immediate budget.

You will also want to try and calculate what the potential income will be for the trust. The exact allocation has not yet been announced, however it would be reasonable to assume that it is on a similar basis to the existing funding. 

Of course there is also a knock on impact in future years, with the increase being compounded going forward. This will need to be factored into the starting point for your year 2 and 3 budgets. If there has been a significant impact on your budgets, you may consider making an additional budget submission to the ESFA.

In year budget monitoring
You should still be monitoring against the budget submitted to the ESFA throughout the year as this is what they will do, however you will also want to compare against your revised budget. Additionally, If your revised budgets are significantly different to those originally submitted, you should consider if revised budgets should be approved by the board and submitted to the ESFA. This is particularly pertinent if the changes create a deficit in future years that was not forecast in your original budgets submitted.

Should you have any questions please contact your usual Bishop Fleming contact.