Pay and Pensions
Pay:
First The Age Of Austerity,
Now The Age Of Uncertainty
Coalition Pay Decisions
So Far – The Pay Freeze
2 year pay freeze in public sector on Salaries
over £21,000 from either 2010 or 2011
depending on scheme
Further freeze at 1% for two years after that
For teachers, began September 2011
Pension contribution increases of more than
3% of salary
Coalition Pay Impact On
Teachers So Far
2.3% Pay rise September 2010 – inflation 4.6%
0% pay rise September 2011 – inflation 5.6%
1.2% extra pension contributions in April 2012
0% pay rise September 2012 – inflation 2.6%
Net result: 11.7% fall in real
income while at work
Pay Impact Still To Come
1.0% Pay Rise September 2013 – inflation 2.2%
1.2% Pension Contribution increase 2013
1.0% Pay Rise September 2014 – inflation 2.0%
0.6% Pension Contribution increase 2014
Further real pay loss = 4%
Total real pay loss Sept 2009 to Sept 2014
= 15.7%
1% If You’re Lucky!
“The statutory minima and maxima for classroom
teachers’ pay will be uprated by 1% in each year 201314 and 2014-15. Schools are free to determine the
extent of pay uplifts to teachers within the statutory
minima and maxima, and will be able to provide an
uplift of 1%, in line with any overall uplift in pay in the
public sector, if they so choose.”
Michael Gove – December 2012
(The Review Body has yet to be asked what to
do about the 1% pay limit for teachers!)
Public Sector Pay Levels Seem To
Have Risen Because Lower Paid
Workers Have Transferred To The
Private Sector
Public Sector Graduates Lag
Behind Private Sector, 2012
“By looking at the difference in average earnings
between the sectors by qualification, for all
individuals with a qualification up to higher education
level, those in the public sector earn on average
more than those in the private sector. However, for
those with the highest level of education, a
degree or equivalent, employees in the public
sector earn, on average, 4.1 per cent less than
employees in the private sector.”
Office For National Statistics March 2012
Private Sector Pay Now
Growing Faster
• “private sector earnings are rising by around 2.1 to 2.3 per cent while
public sector earnings are rising by around 1.5 per cent
• “private sector pay has strengthened in recent months
• “Public sector earnings growth of around 1.5 per cent is coming from a
variety of modest pay rises for different groups. Some pay growth is from
the rises of £250 for those earning below £21,000 eg in the NHS. Some
pay growth is from the first settlements under the 1 per cent policy eg the
fire service from July 2012.
• “There is also a long-term effect of slimming down the public sector
workforce. As support staff are removed or outsourced, the average
earnings of those who remain tends to rise. This process also has the
opposite effect of lowering the average in the private sector.”
Incomes Data Services Oct 2012
Decollectivising Pay – Gove’s
Remit For The Review Body
 “how the pay framework for teachers should best be made
more market facing in local areas”
 “how the pay scales, including the main and upper pay
scales, should be reformed to more effectively link pay
and performance, including arrangements for
progression”
What Gove Got From The
Review Body
•Turned down on regional and local pay
•More than he could have hoped for on
individualising pay and removing
scales
Main Scale
 NOW
 Currently contains points M1 (£21,500) to M6 (£31,500) or up to
£5k more in London
 Vast majority of teachers now move up annually
 IN FUTURE
 No more increments based on years worked
 Movement based only on outcome of annual appraisal
 Increase can be any amount however small, or none
 Present pay points kept “for reference only” to “indicate the pay
level that might be achieved after a certain period, subject to good
performance and development .”
 NQTs successfully completing induction would automatically move
to M2
Upper Pay Scale (UPS)
NOW
3 points - £34k to £36k in rest of country, up to £45k in London
Achieved by applying for and crossing the Threshold when on M6
Normally 2 years satisfactory Performance Management needed to progress to
each further point
 IN FUTURE
 Threshold process replaced by head teacher assessment, to determine
 “substantial and sustained achievement of objectives, appropriate skills and
competence in all elements of the Teachers’ Standards, and




 “the potential and commitment to undertake professional duties which
make a wider contribution (which involves working with adults) beyond
their own classroom.”
 Same minimum and maximum payment, but no fixed number and size of points
 “the amount and timing of any progression should be at the school’s
discretion”
 Teachers can apply before M6
TLRs
Present system remains, but
“in addition there should be provision to pay a
fixed-term TLR for a time-limited project”
should be between £500 and £2,500
“should not replace the use of existing TLRs
for sustained responsibilities which are part
of the school management structure”
Recruitment and Retention
Payments
Time limits on using them to be removed
They should be encouraged as a way of
dealing with “hot spot” teacher shortages
You No Longer Take Your Pay
Point With You When You
Move School
“there should be no obligation on schools to
match a teacher’s existing salary on either
the main or upper pay scales”
“it will not therefore be appropriate to regard
a salary awarded in one school as the basis
for all future postings”
Posts For Classroom Teachers
Above The Main Scale
 New post to replace AST and ET
 “a distinctive post for a teacher whose primary purpose
is the modelling and leading improvement of teaching
skills”
 “paying a salary higher than the maximum of the upper
pay scale”
 Salary determined post by post with no automatic
progression, but within the AST salary range
Unqualified Teachers
Maximum and Minimum of pay range to stay
the same
Schools to determine individual by individual
where they go within the range
No reference points
No automatic pay progression
Policing The Reforms
“In the context of Ofsted’s responsibility for inspecting the quality of
leadership and management we invite the Department to consider with
Ofsted and other interested parties (such as the National Governors’
Association and NEOST) what combination of approaches would be most
appropriate. In our view, this should include:
1.
Reinforcing the need for all governing bodies to review the school’s
existing pay policy to ensure it adequately takes account of the
changes to the system of pay and progression, including clarity on
links to appraisal.
2.
Requiring head teachers to report annually to their governing bodies
on the effectiveness of school’s arrangements for linking appraisal
to pay progression
3.
Developing Ofsted’s inspection framework in relation to the
leadership and management of schools to provide assurance that
pay flexibilities are being managed in the best interests of pupils
and with budgetary probity.”
Policing The Reforms
Not Finished With “Reform” Yet
Pensions:
Bill Before Parliament
 The Bill provides that the normal pension age and
deferred pension age of members in most schemes
be the same as their state pension age, or 65,
whichever is greater. This prevents scheme-specific
agreements with different provisions.
 The Bill specifically forbids final salary schemes as an
acceptable scheme type.
 The Bill also suggests that the Government can make
retrospective changes to scheme benefits and
accrued pension rights provided that it consults.
 The Bill requires scheme regulations to set an
employer cost cap, and sets out how the cap should
be set, measured and operated.