Pension costs threaten jobs

1st November 2002 at 00:00
Budget fears as contributions rise. Michael Shaw reports.

FINANCIAL advisers this week warned that an increase in pension contributions will mean some schools will have to spend up to pound;12,000 extra on employing teachers or could even have to sack staff.

Schools will have to spend an extra 4.75 per cent on teachers' pension contributions from April, raising the average total annual spent by more than 3 per cent.

State schools will receive some compensation from the Government, which plans to pass on pound;586 million which the Treasury will save by cutting its contribution.

Private schools will be worst hit as they are unlikely to receive help and are considering raising their fees by 10 per cent, as reported in last week's TES.

Financial advisers this week said that some state school heads may also not receive adequate compensation.

The pound;586m is expected to be redistributed via councils on a per-pupil basis, meaning schools with more teachers than average, or more experienced teachers, could lose several thousand pounds.

George Phipson, financial consultant for the National Association of Head Teachers, said an average secondary will be paying an extra pound;1,200 for each member of staff it employed beyond the average of 70.

As the numbers of staff at such a school tend to range from 60 to 80, this means a school could face a bill of up to pound;12,000.

Mr Phipson said: "A large school might even have to get rid of a teacher to pay the extra pension cost for its staff. These are worrying times, and this is something that heads should be talking to their local authorities about."

Similar concerns were expressed by the Secondary Heads Association finance consultant Peter Downes.

The Department for Education and Skills said the extra money going into schools would cover the costs incurred because of the pension change.

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