Question to the Department for Education:

To ask the Secretary of State for Education, whether additional funding to further education institutions in England to compensate for the increase in pension contribution under the Teachers’ Pension Scheme and the Local Government Pension Scheme from 1 April 2020 will lead to a Barnett consequential for Wales.

On 10 April, the department set out its plans to fund further education providers in England to compensate them for the increase in employer pension contributions under the Teachers’ Pension Scheme from September 2019 to July 2020. The details can be found here: https://www.gov.uk/government/publications/teachers-pension-scheme-employer-contribution-grant-further-education-providers.

This grant is being made in 2 payments: one in September 2019 and one in April 2020.  Following the Spending Round announcement on 31 August, we have been able to confirm that we will continue to provide this funding for the rest of financial year 2020-21. The details of the allocation for 2020-21 and the amounts for the remainder of that financial year are still to be determined, based on the most recent data from the Teachers’ Pension Scheme, and these will be announced in due course.

The department has no plans to provide additional funding specifically for contributions for the Local Government Pensions Scheme.  However, the government has announced £400 million additional funding for 16-19 education in 2020-21, which is a 7% increase in funding for education providers for this age group, in addition to the funding for teachers’ pensions.

The Barnett Formula determines changes to the block grant funding allocated to the devolved administrations by the UK government. Under the Barnett Formula, the Welsh government receives a population-based proportion of changes in planned UK government spending on comparable services in England. The Barnett Formula therefore determines changes to each devolved administration’s funding with reference to changes in Departmental Expenditure Limit funding for the department.

The additional funding for the department in the August 2019 Spending Round will, therefore, be reflected in the normal way in the block grant for the Welsh government. The funding for further education pensions in 2020-21 will come partly from an addition to the department’s allocation and partly from re-prioritisation of resources within the baseline allocation for the department.