The government is expected to announce the 2022/23 pay award for teachers in the next month but, already, there is growing discontent. In March, the government asked the independent school teachers’ review body (STRB) to recommend a pay raise for all teachers. They proposed increases on a sliding scale, with the greatest increases for teachers in their first year of teaching: it ranges from 17 per cent for early-career teachers over the next two years down to only 5 per cent for experienced teachers on the upper pay scale over the same period. That would bring teachers’ starting salaries up to £30,000 by 2023/24, but the pay increase would be smaller for senior teachers and for teachers in London. The STRB is now considering the evidence it has gathered and its advice, along with the government’s response and decision, are likely to be published in July.
Teachers’ unions have opposed a differentiated pay rise and their submission to the STRB called for both a constant percentage increase across all staff and a greater increase than the government recommended. Their opposition has intensified as the cost of living has risen and the NEU is now threatening to ballot members on strike action in autumn if the pay offer is not increased.
The debate is being conducted in the shadow of dramatic increases in the cost of living as energy prices rise and disrupted global supply-chains increase the cost of imports. Those cost pressures are likely to be temporary but they are starting to push up private sector wages, which may make the department’s preferred pay settlement relatively less attractive and affect retention.
The state of teacher supply
We have recently written about the state of recruitment and retention in the teaching profession, highlighting similar issues to those identified by the Department for Education (DfE) in its evidence to the STRB. The DfE forecast that the number of secondary teachers will need to grow by 5,000 between 2020/21 and 2024/25. Unfortunately, recruitment targets are not being met and nearly a third of teachers leave the profession within five years of qualifying. If that persists, the required numbers will not be achieved, and pupil-teacher ratios will continue to rise.
The DfE also emphasises that these difficulties do not affect all subjects and all parts of the country equally. For example, forty per cent of STEM teachers quit the profession in their first five years, compared to only 34 per cent of other teachers. Similarly, London has retention rates that are far worse than those across the rest of England.
These problems are not new and EPI, among others, has recommended using pay as a lever to improve matters since before the pandemic. Using targeted increases in pay for early-career teachers, teachers in challenging areas, and teachers in shortage subjects may help mitigate some of the problems the profession is facing. The DfE instituted retention bonuses for some shortage subjects and regions before the pandemic struck but they were cut when teacher numbers surged in 2020. However, the department recently made the welcome decision to revive retention payments through the levelling-up premium.
Falling pay for teachers
Internationally, England is unusual in having allowed teachers’ pay to fall in real terms over the past decade. The IFS calculate that, between 2007 and 2014, teachers’ pay fell by 8 per cent after accounting for inflation; across the rest of the economy, average earnings fell by only 6.5 per cent. Since then, earnings for teachers on the main pay scale have risen by between 3 and 5 per cent but they have remained flat on the upper pay scale. In contrast, earnings in the rest of the economy rose by nearly 8 per cent in that time, leaving teachers’ pay far less competitive in 2021 than it was 14 years earlier. In sum, the real value of the upper pay scale has fallen by 8 per cent and, for teachers on the main pay scale, it has fallen by over 4 per cent.
In comparison to other OECD nations, that leaves England near the bottom of the table for pay growth over the 2010s (chart below). In some countries, teacher’s real pay rose by over 30 per cent during that decade but, in England, it fell. It is likely that the fall in real pay has contributed to the recruitment and retention problems the profession has experienced, which lends some weight to the unions’ contention that a greater pay increase is needed.
The case for a flat, undifferentiated pay increase is more difficult to sustain. The chart below compares teachers’ pay to that of similarly educated people in other professions. The UK is mid-pack for the pay of its classroom teachers among OECD nations but pays its head teachers extremely well. That provides some support for the DfE’s contention that the pay raise should be targeted at early-career teachers, which is where the greatest retention problems exist. Flattening the pay schedule would certainly bring England’s pay scales slightly closer to those of comparable nations.
The STRB also addressed this question in 2021 by calculating the differences between teachers’ earnings and those of other professionals in England. As the chart below shows, they found that the earnings of young teachers have fallen behind that of other young professionals, whereas the earnings of experienced teachers are much more comparable to that of their professional peers.
Not only did the STRB find some support for flattening the pay scales, but they also found that the gaps are larger in London than in the rest of England. This is very similar to EPI’s findings on local pay: earnings outside teaching vary greatly across the country and that degree of variation is not reflected in teachers’ pay, which makes the teaching profession less competitive in high-wage regions like London.
There is also significant variation in the competitiveness of teachers’ pay across subjects. NFER’s recent report finds that teachers’ starting salaries are competitive with those of other biology and chemistry graduates but are 27 per cent lower than the starting salary of physics graduates in other professions (chart below). Unsurprisingly, it is far harder to recruit physics graduates than biology graduates.
In the same report NFER also calculate the likely impact of the DfE’s current proposals on the teacher labour market and find that they are very unlikely to be sufficient to meet the forecast needs. The Bank of England forecast that average pay across the UK will rise by about five per cent in the next year so the department’s proposed average increase of only four per cent is more likely to intensify the problems than solve them.
Teachers’ pay in England has fallen behind on most benchmarks, both historical and international, and the DfE’s proposed pay rises are too small to remedy that. It suggests focusing its limited resources on the early-career teachers, shortage subjects, and challenging areas of the country where they are likely to have the greatest effect.
The NEU’s call for a flat pay increase across all teachers may help to improve recruitment and retention if the pay increase were large enough, but it would certainly be far more expensive than the department’s approach. Within a fixed funding envelope, it is also possible that lifting the pay of all teachers would do very little to remedy the inequities in provision, such as the very limited supply of physics teachers in disadvantaged schools across much of England.
Nonetheless, given the rising cost of living, the government will need to consider increasing spending on teachers’ pay if it wants to avoid further recruitment and retention problems, and even strike action. The department may be spending more than ever in cash terms but rising inflation, energy costs, and pupil numbers will rapidly eat into that.
If the government does choose to increase its pay offer to match rises in private-sector wages, it will also need to consider the implications for schools’ budgets. Staff costs account for 70 per cent of schools’ spending, which means that a one percent increase in teachers’ pay costs schools about £250 million in 2022/23 and more in the following years. With other costs rising, the department’s evidence recognises that a larger pay raise than they propose would leave headteachers struggling to invest in other priorities, including education recovery, without additional funding. Unfortunately, the Treasury seem reluctant to reopen the spending review to allocate more funding to education for teachers’ salaries: the cost squeeze means there is now simply less to go around and it would set an expensive precedent for other ongoing public sector pay negotiations.
This puts the secretary of state, who makes the final decision, in a difficult position. He can stick with the lower pay offer and risk both industrial action and the loss of talented teachers, he can increase the pay offer and squeeze schools’ budgets to the point that other activities are cut, or he must face the Treasury and ask for more money as real incomes fall. Targeted pay increases for teachers most likely to leave are a step in the right direction but allowing the pay of experienced teachers to fall behind that of other professions and risk industrial action could have consequences for children’s education. It may be that Nadhim Zahawi will have to reopen negotiations with the Chancellor if he is to succeed in his negotiations with teachers.