Salary Increases: Inadequacy of in Comparison to Other Groups

Rt Hon Charles Clarke MP Secretary of State for Education and Employment Sanctuary Buildings Great Smith Street London SW1P 3BT 12 December 2003

Consultation on the School Teachers’ Review Body (STRB) Thirteenth Report (Part 1) and the Secretary of State’s Proposals: Response of the National Union of Teachers

The National Union of Teachers has considered carefully Part 1 of the Thirteenth Report of the STRB and your response to it. This letter sets out our response to your proposals.

Salary Increases

We believe that the STRB’s proposals for pay increases of 2.5 per cent and 3.25 per cent from 1 April 2004 and 1 April 2005, with no further increases until September 2006, amount in practical terms to a pay freeze which will ensure that teachers’ salaries are unable to compete effectively with those of other graduate professions.

The proposed increases are below both the increases in average earnings and inflation. The 2.5 per cent proposed is not only significantly less than the latest available figure for average earnings increases in the whole economy of 3.6 per cent, but is less than half that of the latest public sector average earnings increase of 5.6 per cent. The IRS Pay and Benefits Bulletin notes that the average of forecasts for average earnings in 2004 is 4.1 per cent. Teachers’ pay will therefore fall behind the increase in earnings for the rest of the economy. This will adversely affect recruitment and retention as potential recruits to the teaching profession will contrast the pay award with the higher increases being paid elsewhere. Furthermore, it will send a clear message to existing teachers that the Government does not properly recognise and reward their contribution to education.

The proposed pay imposition for 2004 is not only below average earnings, it is lower than inflation. The headline rate of inflation is currently 2.6 per cent and the underlying rate (RPIX) 2.7 per cent. The average of forecasts for 2004, according to the IRS, is 2.6 per cent. There is also a serious prospect of increasing mortgage costs, which will further reduce teachers’ standard of living.

Your proposal to cut back the 3.25 per cent award proposed by the STRB for April 2005 to September 2005 serves only to add to the inadequacy of the STRB’s proposals. It will cost a teacher on the top of the main scale some £85 and will depress the value of the pay increase for such a teacher for the period April 2005-March 2006 from 3.25 to 2.9 per cent.

Cont’d/… Rt Hon Charles Clarke MP -2- 12 December 2003

The increase in teachers’ pay between September 2005 and August 2006, compared to the previous twelve months, will be less than 2.2 per cent. Therefore teachers, in addition to having suffered a pay freeze in the first phase of the multi-year award, are to face a further pay cut in the latter phase of the proposed award.

Multi-Year Imposition

The NUT is opposed to the proposed multi-year imposition.

The STRB’s acceptance of the Government’s proposals for a multi-year award in the context of the Government’s Comprehensive Spending Review approach strongly suggests an intention that multi- year pay awards should become the norm. This is confirmed by the Chancellor’s pre-Budget statement affirming “fixed three year spending settlements” and his associated letter to Public Sector Pay Review Bodies. Such an approach will prejudge proper consideration of teachers’ pay levels and will, we believe, further disadvantage teachers.

The proposal to specify in November 2003 a low pay increase for teachers for the period up to and including August 2006 by a multi-year award imposed through the Review Body mechanism very clearly disadvantages teachers and the education service.

Where multi-year pay deals have occurred elsewhere they have been the result of negotiations and not imposition. The contrast between the two situations is very clearly demonstrated by the difference between such agreements and this proposed imposition by the fact that negotiated multi- year deals tend to be heavily frontloaded and feature inflation-plus elements.

We are also concerned at the danger of inflation exceeding 2.5 per cent not only in 2004, but over the whole period of the multi-year pay imposition. These concerns are in no way lessened by the proposed review mechanism which is patently inadequate. The proposed trigger for a review is almost one percentage point higher than the value of the pay award, which means that inflation could significantly exceed the 2.5 per cent without any recompense for teachers.

The reasons advanced for changing the pay date are not convincing. The proposed change will disadvantage teachers who are retiring and is likely to cause greater disruption to school staffing through mid-year retirements.

The Upper Pay Scale

The proposal to radically change the basis for progression to UPS3 and to reduce considerably the number of teachers achieving that salary position is wholly contrary to the original basis of the upper pay scale and cannot be reconciled with the promises held out to teachers by your predecessors. To seek to change the rules at this late stage in the current cycle will cause deep resentment among the teachers concerned and confirms all the evidence and concerns expressed previously by the Union over the application of performance related pay to teachers.

There are, however, separate bilateral consultations now taking place between the Union and your Department and we will respond in more detail on this issue during those separate consultations.

Management allowances

The STRB recommended that management allowances should be increased in April 2004 in accordance with the proposed general salary increase and then be frozen at that level pending the introduction of new arrangements in April 2005. These new arrangements were to be implemented following discussions between the parties. You propose to bring in this new system a year earlier than recommended by the STRB with no guarantee as to what increases should operate, or from what date.

The Union is entirely willing to enter into a review of the present management allowances and has consistently sought changes and improvements to the present arrangements. The Union in any such review will continue to seek proper salary recognition for additional responsibilities. In particular, we have on a number of previous occasions pressed the STRB and the Government to introduce clear national criteria governing the numbers and levels of payment for additional responsibilities. Had this been accepted and pursued the variations and lack of consistency in the present arrangements cited by the STRB would not now be a problem.

We do not, however, believe that such discussions are assisted by the proposed withholding of the increase from 1 April 2004 recommended by the STRB. Furthermore, payments for the additional responsibilities currently undertaken by many teachers are a key component of the salary structure as a whole and the STRB has indicated that in its January report it will be addressing important issues of future salary structure.

We do not believe it would be sensible or helpful to any of the parties to be under pressure to undertake a review within an inadequate timescale because of the failure to increase management allowances from 1 April 2004, or that holders of management allowances should be denied an increase from 1 April 2004 in line with an appropriate general salary increase.

London and Fringe Area Salaries

The key cause of the serious and particular recruitment and retention problems in London and the Fringe Area is the inadequacy of the allowances/salary premia. The STRB’s recommendation that new scales be implemented for Outer London and the Fringe Area does not address this central problem. The truth of this statement can be demonstrated by reference to the experience of the Inner London pay scale introduced in April 2003. Recruitment and retention has continued to be a problem, both for Inner London and surrounding areas.

The STRB recommended a delayed differential increase to the starting salary for teachers in Inner and Outer London from April 2005. This would be worth around 1 per cent in addition to the general pay award proposed by the STRB for April 2005. Your proposal to delay still further this differential increase in order that it does not come into effect until September 2005 not only reduces its value to the teachers affected, but will add to the already severe problems of recruitment, retention and turnover to the general detriment of the quality of education in the schools concerned.

The STRB also recommended a differential increase for teachers in Outer London effective from April 2005. This increase would only have been worth some 4 per cent (excluding the differential increase for starting salaries in Inner and Outer London) compared with the 3.25 per cent proposed by the STRB for teachers elsewhere. Under your proposals, the STRB’s recommendations will again be pushed back to September 2005 with the same adverse consequences referred to in the previous paragraph.

The STRB’s recommendations and your proposals contain nothing for teachers in the Fringe Area. Recruitment and retention problems in the Fringe Area will therefore continue to grow because of the high cost of housing.

In summary therefore the STRB’s proposals for London and the Fringe Area are not sufficient to recognise the additional costs in those areas. The NUT will continue to campaign for all teachers in Inner London to receive a salary premium of no less than £6,000, and for teachers in Outer London and the Fringe Area to receive no less than £4,500 and £2,500 respectively.

Recruitment and retention allowances

The proposal to abolish the recruitment and retention allowance scale and replace it with complete discretion for such payments under paragraph 48 of the Pay and Conditions Document is not a coherent solution to the problems.

We have previously argued that there is already significant discretion within the salary structure to award recruitment and retention allowances. Increasing this discretion still further will exacerbate the problems of inconsistency in the salary structure and lead to further inequity and unfairness. Complete discretion will only increase the tendency for such allowances to be awarded on the basis of the school’s financial position rather than on any objective factors, to the detriment of the staffing of those schools whose needs are not properly reflected in their funding.

We pointed out in our evidence to the STRB of July 2003 that pay flexibilities lead to schools poaching staff from one another. Schools with budgetary problems will be at particular risk of losing out in such bidding wars. Such poaching will increase turnover. The adverse impact of high turnover on the quality of education has been amply and independently demonstrated by the Smithers and Robinson research submitted previously by the NUT. It follows that still greater provision for pay flexibility is bound to worsen these problems.

In short, any reduction in the value or security of recruitment and retention allowances will have serious consequences, particularly in London where one in five classroom teachers receive them. Teachers in receipt of recruitment and retention allowances are often those at most danger of being lost to the profession. Should the value of their allowances be reduced, teachers will be more likely to leave the profession.

Yours sincerely,

Doug McAvoy General Secretary