Chancellor stokes union fury by signalling an end to national pay

Eve-of-strike announcement is a `recipe for disaster'

In the week that hundreds of thousands of heads and teachers staged a national strike, Chancellor George Osborne poured petrol on the flames by saying he intends to introduce regional pay deals for teachers.

In a move that will place even greater strain on relations between the Westminster Government and teaching unions, he also used his autumn statement to announce a cap on teachers' pay rises of 1 per cent for two years, once the public-sector pay freeze ends in 2013. But it is the decision to attempt to introduce regional pay settlements that will incense heads' and teachers' leaders, who have long held national pay bargaining to be a sacred cow of industrial relations.

Speaking in the Commons last week, the Chancellor said the Government has instructed independent pay-review bodies to look into how public-sector pay can be "more responsive" to local labour markets. "This is a significant step towards creating a more balanced economy in the regions of our country that does not squeeze out the private sector," he said.

He added that while a 1 per cent pay cap was "tough" for public-sector workers, "the country could not afford a 2 per cent increase assumed by some government departments".

The Treasury has instructed the School Teachers' Review Body, which oversees pay and conditions for teachers and heads in England, other than those employed by academies, to investigate regional pay deals and report back by July. The decision has been criticised by union leaders, who believe the move will have a detrimental impact on the ability of schools to attract high-quality teachers to areas outside the South East.

Sue McMahon, NUT divisional secretary in Calderdale, West Yorkshire, said the proposals would be calamitous for schools in the north of England. "It is a recipe for disaster. All this will do is create a northsouth divide," she said. "We've always had a very high rate of young people coming into the profession in Calderdale. A local pay settlement will totally stifle that."

Heads' union the NAHT agreed, adding that regional pay deals would lead to fewer teachers moving around the country. "It creates serious concerns about the mobility of staff," said NAHT general secretary Russell Hobby. "It will make it much harder to move from the south-east to the north."

He added: "All the research says teachers' salaries is the biggest deterrent for graduates from the top universities and career-changers. Proposals such as this won't help."

The timing of Mr Osborne's announcement on pay deals, coupled with a 1 per cent cap on teachers' pay rises, drew particular criticism from the unions, with the ATL describing it as a "calculated, inflammatory move" by the Government.

The two-year pay cap will mean teachers' salaries will have risen by just 0.25 per cent a year over four years, once the salary freeze is taken into account. The Chancellor insisted any money saved from this pay cap would be spent on schools.

But ATL head of pay, conditions and pensions Martin Freedman said ministers were taking a "rather nasty gamble" on teachers not wanting to lose more pay by staging further action.

James Groves, head of the education unit at right-wing think tank Policy Exchange, suggested that national pay bargaining was likely to become weaker with the rise in the number of academies. "I think the unions will be fighting a losing battle in this," he said.

How the world of education fared

pound;1.2bn of additional capital funding for schools over the remainder of this Westminster Parliament.

An extra pound;600m will fund 100 free schools, including 30 new 16-18 specialist maths free schools, while a further pound;600m has been made available to fund additional school places where there is greatest need.

The Chancellor also said the Government will invest a further pound;380m a year by 2014-15 to extend its new offer of 15 hours of free education and care a week for disadvantaged two-year-olds to an extra 260,000 children.

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