Transcript Slide 1

Pay and Pensions
First The Freeze, Now
The Squeeze
Coalition Pay Decisions
So Far
2 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 that
For teachers, began September 2011
Colleges 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 Come
1.0% Pay Rise September 2013 – inflation 2.2%
1.2% Pension Contribution increase 2013
1.0% Pay Rise September 2014 – inflation 2.0%
0.6% Pension Contribution increase 2014
Further 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 highquality 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 timelimited 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 localfacing 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 Modelling
Pay 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 levels
3. 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 levels
6. 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 Parliament
 The 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 plans
 The Pensions Bill will soon become law
 It sets the overall rules for public sector schemes
 More 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 extended
 We 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.