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Exclusive: Schools hit by 'devastating' rise in pension costs

Warning as schools faced with 43 per cent rise in contributions to teachers' pensions

Budget

Warning as schools faced with 43 per cent rise in contributions to teachers' pensions

Cash-strapped schools are bracing themselves for yet another squeeze on budgets after being told they must increase contributions to the Teachers' Pension Scheme by 43 per cent from next year.

Following a government review into public sector pension schemes, schools were told in an email yesterday that employer contributions will rise to 23.6 per cent from September 2019. The current rate is 16.48 per cent.

Headteacher Jules White, coordinator of the Worth Less? campaign, which is organising a march of 1,000 headteachers on Downing Street this Friday in a protest over funding, said: "It is difficult to believe that the government would deal another devastating blow to our already crippled budgets."

The email states that funding will be available from the Department for Education to "help" maintained schools and academies meet the additional costs.

But Geoff Barton, general secretary of the Association of School and College Leaders, said he would be seeking assurances that funding would cover the cost of the increased contribution rate "in full" not just for next year but for future years.

School budgets 'under severe pressure'

He said: “Schools and colleges are very concerned about the potential impact of this.

“They cannot afford yet another unfunded cost on budgets which are already under severe pressure.

“We are reassured to an extent by the government’s intention to provide additional funding to schools and colleges in 2019-20 in respect of this extra cost.

“But schools and colleges face uncertainty beyond 2019-20 because we will not know the arrangements for future years until the comprehensive spending review has taken place next year."

Other headteachers said the announcement had come out of the blue. But Treasury minister Liz Truss hinted at a rise earlier this month in a statement to Parliament relating to a four-yearly review of public sector pension schemes.

Julian Thomas, master of Wellington College, an independent school in Berkshire, is concerned that the rise of 7 percentage points amounts to a real-terms increase of more than 40 per cent. 

Mr Thomas, who is also chief executive of the Wellington Group of Academies and Schools, said: “This is massive. It’s a very big deal for everyone who I’ve discussed this with.

"This has come entirely out of the blue. Any school that is clearly having to pay [43 per cent] more than it was is clearly going to have to think very carefully about how it funds this.

“Schools like Wellington are in a robust financial position and will be able to deal with this, but there will be some very serious issues. There is no doubt that this will have a significant impact on schools in both the sectors."

The email, sent by Employer Link, on behalf of the Department for Education, states: “There will be funding from the DfE for the financial year 2019-20 to help maintained schools and academies meet the additional costs resulting from the scheme valuation, and a consultation process will take place to determine final funding arrangements. Funding for 2020-21 onwards will be discussed as part of the next spending review round.”

The DfE has been contacted for a comment.

 

 

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