Where exactly is the money coming from to fund an increase in teacher pay?
On 24th July, Elizabeth Truss, Chief Secretary to the Treasury, gave teachers a nice summer holiday gift – she announced in the Commons with “delight”, details of the long-awaited pay award for teachers. She sneakily held off this announcement until schools had broken up for the summer to drop the bombshell that she was (yet again) going to ignore the recommendation of the Teachers Pay Review Body.
Reallocating the budget
As well as going against the full recommendation of the Pay Review Body, she was a ‘little shirty’ about where the money was coming from. She announced, “We will be allocating a further £500 million from central Department for Education (DfE) budgets to schools…”.
What exactly does “allocating” mean? Well, it actually means reallocating – taking money the DfE already has from the Treasury and using it to fund the pay rise. Specifically, the money is coming from “under-spends in central DFE budgets” and not previous under-spend, but projected under-spends in the future.
Last week, the DfE eventually released specific details about this reallocation. It took a Freedom of Information request followed by a complaint to eventually get them to speak up!
Their initial response was very tight-lipped and failed to outline the request to be specific about “under-spends” within Damian Hind’s department in detail. Following the complaint, an attempt seems to have now been made to explain these under-spends.
Where is the money coming from?
The full cost of the Teachers’ Pay Grant is £187 million for 2018-19 and £321 million in 2019-202. This money will be taken from money originally set aside for the Core School Budget and Pupil Premium funding. Why are they reducing Core budgets and Pupil Premium funding to schools? Well, it seems that the DFE didn’t know how many pupils would be attending secondary school in 2018-20 so they had more money than they needed. Worryingly, this suggests that within the department they have no accurate way of estimating pupil numbers in secondary schools year on year. By their own admission, they are having problems estimating Pupil Premium numbers for these years and had overestimated.
The reality of the situation is that they can’t estimate accurately (their admission) so they are taking the money from Core School Budgets and reallocating it to staff pay. This leaves the questions of “What if their estimates continue to be wrong? Will they suddenly find money to increase Core and Pupil Premium budgets?”