Pay and Pensions

First The Freeze, Now The Squeeze

Coalition Pay Decisions So Far2 year pay freeze in public sector on Salaries over £21,000 from either 2010 or 2011 depending on scheme

Further freeze at 1% for two years after thatFor teachers, began September 2011Colleges had already frozen pay for a year before

Pension increases have eroded and will further erode take-home pay

Coalition Pay Impact On Teachers So Far

2.3% Pay rise September 2010 – inflation 4.6%

0% pay rise September 2011 – inflation 5.6%

1.2% extra pension contributions in April 2012

0% pay rise September 2012 – inflation 2.6%

Net result: 11.7% fall in real income while at work

Pay Impact Still To Come1.0% Pay Rise September 2013 – inflation 2.2%

1.2% Pension Contribution increase 20131.0% Pay Rise September 2014 – inflation 2.0%

0.6% Pension Contribution increase 2014Further real pay loss = 4%Total real pay loss Sept 2009 to Sept 2014 = 15.7%

Public Sector Pay Levels Seem To Have Risen Because Lower Paid Workers Have Transferred To The Private Sector

Estimating Differences in Public and Private Sector Pay, 2012“By looking at the difference in average earnings between the sectors by qualification, for all individuals with a qualification up to higher education level, those in the public sector earn on average more than those in the private sector. However, for those with the highest level of education, a degree or equivalent, employees in the public sector earn, on average, 4.1 per cent less than employees in the private sector.”

Office For National Statistics March 2012

Private Sector Pay Now Growing Faster

• “private sector earnings are rising by around 2.1 to 2.3 per cent while public sector earnings are rising by around 1.5 per cent

• “private sector pay has strengthened in recent months• “Public sector earnings growth of around 1.5 per cent is coming from a

variety of modest pay rises for different groups. Some pay growth is from the rises of £250 for those earning below £21,000 eg in the NHS. Some pay growth is from the first settlements under the 1 per cent policy eg the fire service from July 2012.

• “There is also a long-term effect of slimming down the public sector workforce. As support staff are removed or outsourced, the average earnings of those who remain tends to rise. This process also has the opposite effect of lowering the average in the private sector.”

Incomes Data Services Oct 2012

Decollectivising Pay:Gove’s Remit For Review Body “how the pay framework for teachers should best be

made more market facing in local areas”

“how the pay scales, including the main and upper pay scales, should be reformed to more effectively link pay and performance, including arrangements for progression”

“what other reforms should be made to teachers’ pay and conditions in order to raise the status of the profession and best support the recruitment and retention of high-quality teachers in all schools”

He Wants To Limit Pay Progression

“In a system where pay progression is awarded to the great majority of teachers, the association between performance and reward is weak. …..under the current system pay progression becomes primarily a reward for time served.”

“There has been some interest from other consultees in reviewing TLRs – with the aim, for example, of making them temporary or fixed term.”

How Progression Might Be Limited

“The OME’s research survey explored the attitudes of head teachers to the pay flexibilities that are currently available to them:

52 per cent of head teachers did not believe that existing allowances sufficiently cater for the need to reward high performance.

Many head teachers did not believe that Teaching and Learning Responsibilities (TLR), Special Educational Needs (SEN) and Recruitment and Retention (RR) allowances are sufficiently flexible (37 per cent, 24 per cent and 25 per cent respectively).

The survey prompted those who were not satisfied with the current reward system for their views on alternative flexibilities:

71 per cent head teachers agreed with proposals for enabling time-limited payments.

67 per cent supported enabling greater flexibility in the size of the reward.

62 per cent wanted the provision to share payments between teachers.”

Local Rather Than Regional?“National pay scales mean schools in some parts of the country struggle to recruit and retain good teachers, while others may be paying salaries which are significantly above local professional pay levels. The current four area pay bands do not help schools with this problem but rather contribute to local variations in supply and demand .”

“There are disparities between teachers’ pay and private sector pay which vary widely across local authorities, with pay levels for teachers appearing generous relative to private sector professionals in some local authorities and not comparing favourably in others.”

Hot Spots

“This variance in teacher vacancy rates not only across regions, but also across schools in a single local authority area, suggests that a more flexible local-facing pay structure could support more effective recruitment and retention of teachers. “

“It is also possible that a greater degree of local-facing pay might encourage greater movement of good teachers into areas experiencing high levels of vacancies or vacancies in particular subject areas. “

Teachers’ Pay vs Private Sector Pay“Teachers working in over half of local authorities in Inner London, Outer London and the Fringe may be earning relatively lower salaries than private sector professionals working in those areas.”

“Teachers working in the Rest of England and Wales: teachers are earning relatively higher salaries than private sector professionals working in those areas. “

Local Pay ModellingPay is compared with house prices and private sector pay in each local authority

Bradford teachers are substantially overpaid but Leeds teachers are paid the right amount on these measures

Yet the vacancy rates in Bradford schools are more than 5 times higher

So Authority-based pay is now seen as unlikely

Options Given By Government For The Review Body To Consider

1. Complete deregulation including the removal of existing area pay bands

2. Deregulation within minimum and maximum pay levels3. Deregulation with minimum pay level 4. Deregulation within set minima and maxima pay levels

of the current area pay bands 5. New pay zones and hot spots with deregulation in

between the set minima and maxima pay levels6. Three pay scales (qualified, unqualified and leadership)

with set minima and maxima pay levels with deregulation in between and retain existing pay band areas - and the variants of this above

7. Three pay scales with spine points between set minima and maxima, existing pay levels and existing pay band areas

8. Three pay scales with spine points between set minima and maxima, existing pay levels and existing pay band areas, and new zones and hotspots

Pensions:Bill Before ParliamentThe Bill provides that the normal pension age and deferred pension age of members in most schemes be the same as their state pension age, or 65, whichever is greater. This prevents scheme-specific agreements with different provisions.

The Bill specifically forbids final salary schemes as an acceptable scheme type.

The Bill also suggests that the Government can make retrospective changes to scheme benefits and accrued pension rights provided that it consults.

The Bill requires scheme regulations to set an employer cost cap, and sets out how the cap should be set, measured and operated.

Pensions Motion at Last NUT Exec

“In continuing our discussions with the NASUWT and other TUC affiliates, the Union will point out that the DfE’s proposed further increases in pension contributions for April 2013 confirm the further losses in income that will be imposed on teachers, on top of a continued pay freeze. These losses are one of the reasons why we are seeking to explore the practicalities of a co-ordinated programme of strike action on pay, pensions and jobs…….

Where Now On Pay & Pensions For Teachers?

Gove has had the Review Body Report for some weeks

He will choose his time to reveal his plansThe Pensions Bill will soon become law It sets the overall rules for public sector schemesMore discussions will then take place on the details of the Teachers’ Scheme

Erosion of take home pay from the pay freeze and the pension contribution increases will continue until we can stop them.

Triggers For Action Over Pay & Pensions For Teachers

In the STRB Report there will be issues relating to local pay, individual pay and other kinds of de-regulation which will challenge us as to how we use action to try to prevent their implementation

The continuing national pay freeze can be linked to these changes in any action response

Members continue to feel the injustice over pensions very strongly. 68 Is Too Late!

When Do We Act ?We have a “live” ballot for action with a good majority

The Action Short of Strike Action has built morale in many places

It may be extendedWe need to look for partners for strike action inside and outside teaching

What alliances we can build and what other campaigning steps we can take will influence our timing

We need to make everything we can from our joint work with NASUWT, but not be limited by it if it seems to be holding us back.