After months of delays the government has today accepted the School Teachers’ Review Body’s (STRB) recommendation that teachers’ pay should rise by up to 3.5 per cent, breaking the previous one per cent pay cap. Those in leadership positions will receive increases of 1.5 per cent.

To implement the increase announced today, and with no extra money from the Treasury, the Department for Education has announced an extra £508 million from within its existing budgets. This is not the first time that pressures in school funding have had to be met from elsewhere in the education budget. In July 2017, the DfE announced an additional £1.3 billion drawn from, amongst other things, savings in the capital budget. As yet there appears to be no detail on where this money is coming from.

A crisis in secondary school teacher numbers forms the backdrop to the government’s decision. Recruitment targets have been persistently missed, teachers are leaving at increasing rates and pupil numbers are swelling. The result is fewer teachers in the profession and rising class sizes. The shortage of teachers has become particularly acute in EBacc subjects like physics and mathematics where only half of secondary teachers now have a degree in the subject they are teaching.

Several researchers have suggested additional pay for teachers in shortage subjects to mitigate their declining numbers. In 2015, secondary teachers in the UK earned 21 per cent less than similarly educated graduates and teachers’ starting salaries were 14 per cent lower than the OECD average. EPI has highlighted US studies where a pay supplement improved retention and research commissioned by the Gatsby Foundation estimated that a supplement of 5 per cent for early-career physics teachers would have been sufficient to eliminate the present shortage, had it been introduced in 2010.

The prospect of ameliorating the current recruitment and retention problems makes a pay raise for at least some teachers an attractive proposition. However, the cost of a uniform pay raise for all teachers, and the precedent it sets for other public-sector employees, will give the government pause. Recent government policy froze teachers’ pay scales between 2010 and 2013, and has since restricted increases to one per cent each year, which has caused the value of teachers’ pay to fall by around 10 per cent, relative to inflation. In 2018, for the first time this decade, the government accepted that teachers’ pay could rise by more than one per cent but its evidence to the STRB cautioned that any increase would need to be paid from existing funding commitments.

The Department for Education estimate that current funding allows for a pay raise of up to 2.2 per cent in 2018-19; however, that is a national average and masks the financial pressure that many schools are already under. EPI research found that up to 40 per cent of state-funded schools in England are unlikely to receive enough government funding in 2018-19 to afford even a 1 per cent pay raise for their staff without going into deficit. For 2019-20, that proportion rises to nearly half of schools so, even in the coming year, it would have been infeasible to expect many schools to pay for the STRB’s recommended pay raise from existing funding.

Total funding per pupil (including funding for sixth forms and local authority support services) has declined by 8 per cent since 2009-10 and teachers’ pay accounts for over 70 per cent of many school budgets. The NAO found that many schools have already increased teachers’ contact time, increased class sizes, increased teaching undertaken by senior staff, reduced the size of leadership teams and reduced the number of teaching assistants to accommodate financial pressures. School leaders told the NAO that, without increases in funding, they intend to replace more experienced teachers with younger, less expensive recruits, employ staff on temporary contracts and have staff teach outside of their specialism. In the face of ongoing pressures, schools are still likely to implement many of these strategies to reduce costs.

Increasing teachers’ pay is a sensible step towards making the profession more attractive and overcoming the recruitment and retention difficulties it faces, but that does not come free of charge. Such investment is necessary to maintain the quality, experience and stability of the teaching workforce.