Teacher pay: We have to rip up our school budgets and start again

The delayed and unexpected announcement on teacher pay rises has left schools scrambling to change the budgets they had already drawn up – hardly good financial prudence for the sector, says CST deputy CEO Steve Rollett
22nd July 2022, 7:00am

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Teacher pay: We have to rip up our school budgets and start again

https://www.tes.com/magazine/leadership/finance/teacher-pay-rises-school-budgets
Teacher pay changes ride roughshod over school budget work

The government must pledge that schools and trusts will never again find themselves in the unenviable situation of finalising budgets only to have the rug pulled out from beneath them in the final week of term - indeed, after the academic year had ended in some parts of the country.

Let’s park for the moment the wider concerns that some have about the level of the teacher pay award and the lack of additional funding to support it.

We have been clear that there needs to be additional funding put into the system to support the pay award.

There’s another significant concern that the government must consider: budgeting.

Teacher pay rises: the impact on school budgets

Common practice in school trusts is for budgets for the following year to be prepared and signed off by the board before the close of the summer term.

Proper planning for this process means allowing sufficient time for the budget to be compiled, scrutinised and approved (which the board must minute).

Furthermore, academies must submit a budget forecast return to the Education and Skills Funding Agency (ESFA) in accordance with published deadlines. The deadline for this year is 26 July.

That’s just one week after the government’s announcement on teacher pay. 

What does this mean?

In simple terms, it means that many schools and trusts will have instigated a rigorous process to draw up a balanced budget (as they must) and worked on sensible assumptions about what costs they are likely to face.

Now, though, they will have to go back to the drawing board right at the end of term.

This isn’t just a matter of putting pressure on staff as they head into the summer holidays - as regrettable as that is - it also risks compromising the rigour of budgeting processes. And poor budgeting is a risk to the quality of education in our schools. 

No sensible organisation would seek to plan this way. Yet the timing of the government’s announcement on teacher pay has left schools in just this position.

And it’s wholly contradictory, too, when you set it alongside sections of the Academy Trust Handbook, which states that boards “must ensure rigour and scrutiny in budget management”.

This last-minute approach to setting teacher pay runs counter to the very rules that trusts must comply with. 

A problem with multiple causes

Of course, this isn’t a new problem. Unfortunately, a habit has been long established for governments to push the announcement on teacher pay into the depths of the summer term.

The problem for schools is that staff costs make up the single biggest expense, making budgeting almost impossible without a good sense of anticipated levels of pay. 

But all of this has been brought into even sharper relief this year for three reasons.

Firstly, the level of the pay award is higher than many schools will have budgeted for. Many years of public sector pay restraint, coupled with the government’s own steer to the School Teachers’ Review Body (which makes recommendations on teacher pay) that the award should be around 3 per cent, means that many schools and trusts won’t have factored the level of the award (between 5 and 8.9 per cent) into their budgeting assumptions. It must be said that the award still, however, reflects a real-terms pay cut for most teachers. 

Secondly, there is no additional money from government to fund the award.

Thirdly, it is against a wider backdrop of spiralling energy costs and other cost pressures. 

Importantly, 90 percent of trust leaders who responded to our snap survey yesterday told us that their trust will not be able to meet the pay increases from its existing budget.  

Undermining the DfE’s own ideals

Publishing the pay award now, after schools and trusts have already drawn up budgets for next year, means the government is undermining its own requirements for effective governance and fiscal management.

And the government can gain very little assurance about the financial health of the sector through this process.

For this reason, the Confederation of School Trusts is calling on the government to pledge that it will provide budget information in advance of budget setting so that schools and trusts can deploy their funds to the maximum benefit of children and reduce the workload, stress and inaccurate process that late decision-making causes. 

We can no longer accept submitting budgets and then receiving vital information after the fact.

Steve Rollett is deputy chief executive of the Confederation of School Trusts (CST)

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