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Schools face 'catastrophic' £235 million pension bill

Schools could be hit by with a additional pensions bill of more than £235 million next year, it has emerged.

The Treasury today warned that public sector pensions across the teachers’, civil service and NHS schemes face a £1 billion a year shortfall under current arrangements.

The Department for Education has confirmed that school and college contributions to the teachers’ pension scheme will increase by 2.3 per cent in September 2015.

The Association of School and College Leaders (ASCL) has calculated that this will cost schools £236 million, and warned of “catastrophic” consequences for students.

The ATL union has warned that local authorities could be forced to slash education services in order to meet their increased costs towards the pensions of teachers in maintained schools.

And the pain for schools and colleges is likely to get even more severe in 2016, when changes to National Insurance contributions due to come into effect in 2016 are expected to see their pensions contributions increase by an additional 3.4 per cent.

Malcolm Trobe, ASCL’s deputy general secretary, said the changes would leave schools and colleges with a “huge hole in their budgets”, even taking into account the extra £350 million for the lowest-funded schools announced today.

“This will have a catastrophic effect and lead to larger class sizes and reduced curriculum choice,” he said. “We want the government to ensure that this increase in contributions is fully funded so that children’s education is not compromised.”

The chief secretary to the Treasury, Danny Alexander, said that “excellent” public sector pensions could only be maintained in the future “if we also control the costs in the long term”.

“Ongoing analysis of what is a fair contribution is the final stage of the reforms, which will ensure that long term costs of public service pensions remain under control and are fairly distributed between employees, employers and taxpayer,” he added.

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