Regional pay deals rear their head

2nd December 2011 at 00:00
Chancellor risks further union wrath with plan to abolish national bargaining

In the week that hundreds of thousands of heads and teachers staged a national strike, chancellor George Osborne has poured petrol on the flames by indicating his intention to introduce regional pay deals for teachers.

In a move that will place even greater strain on relations between the Government and the teaching unions, Mr Osborne 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 on Tuesday, 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," Mr Osborne said.

And 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 all teachers and heads other than those employed by academies, to investigate regional pay deals and report back by July next year. The decision has been heavily 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."

"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," Mr Hobby added.

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 was insistent that 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.

Professor Howard Stevenson, an expert in education industrial relations at Lincoln University, warned that the move would "almost inevitably" trigger further industrial action. "Pay and pensions are both trigger points to provoke a response," Professor Stevenson said. "It's inevitably going to inflame the situation. If unions don't take action, they will come under increasing pressure from their members."

Mr Osborne's decision to explore regional pay settlements was supported by Conservative MP Graham Stuart, chair of the Commons education select committee, although he acknowledged that "the unions will hate it". "The question is whether you can come up with a system which better reflects local needs and the local cost of living. If you can, then in principle it is hard to see what you can object to, which won't stop the unions," he said.

Perhaps unsurprisingly, James Groves, head of the education unit at right- wing think-tank Policy Exchange, agreed, adding 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. "Also, it puts pressure on the private sector in those parts of the country, whose salaries are much lower than those on the state pay roll."

However, the unions, fresh from an unprecedented strike, argue that they have rarely been stronger. It seems clear that any attempt to bring in regional pay, whether or not philosophically justifiable, is very likely to lead to more industrial strife.


Mr Osborne used his autumn statement to announce pound;1.2bn of additional capital funding for schools over the remainder of this 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 201415 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.

Original headline: Chancellor stokes union fury by signalling end to national pay

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