Question to the Department for Education:

To ask the Secretary of State for Education, whether it is her Department's policy that any future pay increases for school staff will not come from existing school budgets.

Funding for mainstream schools and high needs, including the additional funding announced at the Autumn Statement 2022, is £3.5 billion higher in 2023/24 compared to 2022/23. Funding for both mainstream schools and high needs will total £58.8 billion in 2024/25, the highest ever level in real terms per pupil. After accounting for the new pay offers in 2023, the Institute for Fiscal Studies estimates that school funding is still growing faster than school costs.

In addition to this core revenue funding, schools receive funding through a number of separate streams, including: the pupil premium, worth £2.9 billion in 2023/24 to support disadvantaged pupils; Universal Infant Free School Meals funding; and the recovery premium and the National Tutoring Programme to support education recovery following the COVID-19 pandemic.

The Department provides these increases to school revenue budgets so that schools can cover cost increases in the year ahead, including to teacher pay.

The Department also has a capital budget of £7 billion for 2023/24, which funds a range of programmes for schools, such as the school rebuilding programme. Information about this particular programme is available at: https://www.gov.uk/government/publications/school-rebuilding-programme.

In February 2023, the Department set out its best assessment of teachers’ pay affordability to the School Teachers’ Review Body, so that they could make an informed independent decision on the pay award. The Department’s approach reflected some of the continued uncertainty around areas like energy costs, as this is a particularly important consideration this year. The written evidence acknowledged that there were circumstances where a pay award in excess of 3.5% might become affordable, on average, for schools. In particular, if energy prices drop significantly. This would provide scope for additional spending in areas which will further benefit pupils, including a higher pay award.

In March, the Government offered teachers a £1,000 payment on top of this year's pay rise, a commitment to cut workload by five hours per week, and a headline pay increase of 4.5% for next year. The offer included further funding of around £620 million in 2023/24, including a grant of £530 million for the one-off payment, as set out here: https://educationhub.blog.gov.uk/2023/03/28/teacher-strikes-latest-everything-you-need-to-know-about-the-teacher-pay-offer/.

By taking into account the Government’s most up-to-date assumptions for both energy prices and support staff pay for 2023/24, it calculates that a 4% teacher pay award should be affordable within existing funding. This includes the overall £3.5 billion funding increase schools are seeing this year, thanks to the additional £2 billion funding announced at the 2022 Autumn Statement. The Government’s judgement of the affordability of teacher pay increases is, as usual, based on national figures, which equate to the position for an average school.

The additional £620 million offered as part of the pay offer would have covered the remaining 0.5% of the 4.5% pay offer, meaning that the pay offer would have been fully funded as per the Department’s national calculations. The Office for Statistics Regulation has confirmed that the Department has set out how it has reached this conclusion transparently, in line with its regulatory guidance on statements about public funding.

Following unions’ rejection of the offer, the teachers’ pay award for 2023 will now be decided through the independent pay review body process, as usual. The Department’s position remains that a 4% teacher pay award should be affordable, nationally, from the funding increases already promised to schools.

As usual, schools should plan for how teacher pay awards could be managed within this existing funding. It would be sensible for schools to consider the range of possible scenarios on pay that might materialise and what the implications would be for their individual school.