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Teacher pay: DfE battling 'tight-fisted' Treasury

Amid a delay in announcing a teacher pay rise, heads warn schools face insolvency if they have to fund it themselves

Money

A dispute between a “tight-fisted” Treasury and the Department for Education is causing the delay in announcing this year’s pay rise for teachers, Tes understands.

The battle comes amid union warnings of a summer of anger if the government forces schools to fund the pay increase from their already-stretched budgets.

The government has yet to respond to the recommendations from the School Teachers’ Review Body (STRB), despite schools minister Nick Gibb saying six weeks ago that the STRB report and the DfE’s response would be published “as soon as possible”.

Teachers are expected to receive an above-inflation increase in September 2018, after the government last year announced it had lifted the public sector pay cap.

However, heads have branded the lack of information – despite the imminent start of the summer holiday – as a "joke".

Tes understands from sources close to the process that the delay is due to a stand-off between chancellor Philip Hammond and education secretary Damian Hinds.

Mr Hinds is arguing that his department should receive extra resources for the pay increase, but a “tight-fisted” Treasury is resisting this demand.

Schools 'risk insolvency'

Last month, Tes reported that the two departments were in discussions about how to avoid schools having to fund the pay rise out of their own budgets.

Options include diverting existing DfE resources towards schools, with suggested solutions including axing the flagship Teaching and Leadership Innovation Fund.

Headteachers this week warned that schools will become insolvent if the pay rise is not fully funded by the government.

The independent Institute for Fiscal Studies has calculated that, compared with a pay cap of 1 per cent, a 2 per cent pay rise would cost schools in England about £200 million extra.

It said a 3 per cent rise could cost an extra £400 million, while a 4 per cent rise would cost an extra £600 million.

At the start of this week, Mr Gibb again said in response to a parliamentary question that “the department will publish the report and the response as soon as possible”.

However, Tes understands that no date has been set for an announcement.

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