NASUWT disputes Powell’s claim pension savings can fund teacher pay rise
The NASUWT says the Government’s 3.5 per cent teacher pay rise is still underfunded, despite Education Secretary Lucy Powell’s assurance that pension savings would help schools afford it. The dispute matters because, if schools must meet the cost from existing budgets, the union warns that staffing and classroom services could be cut.
Powell cited £500 million in savings following a review of Local Government Pension Scheme costs, saying schools could use the improved affordability to cover the award. NASUWT argues those savings were announced earlier and already included in budgets for other purposes. The rise was initially due to be part-funded by the Treasury, with schools covering 1 per cent; the NEU had threatened strikes over the funding. The Department for Education says the award is unchanged and the pension valuation has improved schools’ ability to meet its cost.
- NASUWT says the 3.5% teacher pay rise remains underfunded.
- The union warns schools may cut staff or services.
- The Government says pension savings have improved affordability.
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Teachers are receiving a 3.5 per cent pay rise, but there is disagreement over how schools should fund it. The Government points to pension cost savings that it says can help schools pay for the increase, whilst the NASUWT union disputes whether these savings are available for this purpose.
This matters because if the savings the Government mentioned cannot be used for the pay rise, schools will need to find the money from their existing budgets. This could force schools to cut staff or reduce classroom services.
Pay rises for teachers have long been a subject of dispute. Initially, the Government said schools would cover 1 per cent of the cost whilst the Treasury would fund the rest, an arrangement that led other teaching unions to threaten strikes.
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The case for
The Government argues that the pension scheme review represents genuine improvement in schools' financial sustainability. With £500 million in additional savings now available, schools have improved headroom in their budgets and are therefore in a better position to meet the cost of the 3.5 per cent pay rise. This is fiscally responsible—using efficiency gains and improved financial circumstances to support pay awards rather than requiring additional Treasury spending. The improved affordability is a real change in schools' financial capacity.
The case against
NASUWT contends that these pension savings were already known and already allocated in school budget plans for necessary purposes. Pointing to existing savings as "funding" for the pay rise creates a false choice—schools must now either abandon other planned improvements or cut services to meet the award. The Government is using creative accounting to appear to fund teacher pay whilst actually requiring schools to make difficult trade-offs. A properly funded pay rise should come from new Treasury resources, not by claiming that existing budget improvements can serve double duty.
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Originally published by Daily Mail as “Lucy Powell in new row with union bosses over ‘underfunded’ 3.5% teacher pay rise”.