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Update for 2020/21 - coronavirus special

Bargaining this year will be tougher than previous years. The pressure exerted by the increased TPS employer contribution has been intensified by coronavirus.

The collateral damage to the economy will mean some parents will no longer be able to afford school fees. Some overseas boarders might not have the confidence to return due to the high infection and death rate in the UK.

Regardless, many schools prosper. For many years, fee increases have outstripped inflation and wages and that surplus should have been put aside.

It is important that NEU members submit pay claims, defend their pensions and other terms and conditions and do not accept a coronavirus fait accompli.

If belt-tightening is unavoidable then members should have thoroughly examined the finances and be satisfied that there really is no alternative.

Members need to be prepared and act collectively to protect their interests.

Job Retention Scheme

To date, more than nine million workers in the UK have had 80% of their wages, up to a cap of £2,500 per month, subsidized by the state.

The NEU, as part of the TUC, has lobbied for financial support for business but especially the protection of jobs. The NEU has also used Parliamentary briefings to call for financial support for employees in the independent sector.

The Scheme closes on 31 October 2020. However, the Government has introduced the Job Retention Bonus, giving employers £1,000 for every employee brought back from furlough and remaining in employment until at least 31 January 2021.

The furlough money is not a silver bullet. It will not fully offset the loss in fee income, but it will substantially mitigate it. Unlike many other private businesses, schools’ income hasn’t stopped. Fees have been paid, albeit with partial rebates.

However, there will be job losses. We can’t be complacent.

Cost of living as measured by the Retail Price Index (RPI)

Inflation, as measured by the RPI, stood at 1.1% for the year up to June 2020. RPI is the traditional measure of inflation used by employees and employers. It was introduced in 1947 by the government to assist employers and employees in negotiations over salary increases to reflect rising costs.

Recently, the government prefers the Consumer Price Index, as it is lower due to omitting housing costs. For the year to June 2020, CPI inflation was 0.6%.

Tellingly, the Government uses RPI for its own purposes for index-linked securities & gilts, non-means tested benefits, tax allowances, social housing rent increases, train fare increases and student loan interest rates etc.

RPI and CPI are updated monthly by the Office of National Statistics.

RPI 12-month inflation rate (%)

Jun 2019

Jul 2019

Aug 2019

Sep 2019

Oct 2019

Nov 2019

Dec 2019

Jan 2020

Feb 2020

Mar 2020

Apr 2020

May 2020

Jun 2020

2.9

2.8

2.6

2.4

2.1

2.2

2.2

2.7

2.5

2.6

1.5

1.0

1.1

RPI inflation is forecast to remain around 3% until 2024. Though, these forecasts were made before lockdown, and inflation has been lower

Long-term inflation forecasts (Office Budget Responsibility)

2020

2021

2022

2023

2024

RPI

2.2

2.7

3.1

3.0

2.9

CPI

1.4

1.8

2.1

2.1

2.0

School fee increases

For many years, the average increase in school fees has comfortably outstripped wage increases and RPI. The Independent Schools Council (ISC) census 2020, reports the average increase in school fees was 4.1%; day-schools 4.4%; day pupils at boarding schools 3.8%; and boarders 3.1%. Fee increases for the new academic year are likely to be lower, as some schools freeze fees.

Pupil numbers

The ISC 2020 Census reports growth in pupil numbers to a record high 537,315.  There is an expectation pupil numbers will fall on account of coronavirus.

Playing catch-up

A pay claim could include an element to catch-up on previous years below inflation. The annual NEU independent sector Pay & Conditions Survey consistently reveals that the majority received an annual increase of less than inflation.

How can we seek redress? Submit a pay claim!

State pay awards bests independent

The Government has accepted the recommendations of the School Teachers’ Review Body on school teacher pay in England from 1 September 2020.  Starting pay will increase by 5.5%, with increases of 4.95% to 3.3% on M2-M5 and 2.75% for all other teachers.  TLR and SEN allowances increase by 2.75%.

In Wales starting pay will increase by 8.48%, but taper off to 3.75% on the Main Scale with 2.75% for other teachers.  TLR and SEN allowances increase by 2.75%.  The Main Pay Scale will reduce from 6 to 5 points. Pay scales replace PRP.

Most academies replicate government pay awards.

This will be the third year in a row that increases in the state sector have been higher than the independent sector. In September 2019, the award was 2.75%. In 2018, the headline award for state teachers in England & Wales was 3.5%.

As part of a phased agreement, state teachers in Scotland received an increase of 3% from April 2018; 7% from April 2019; and 3% from April 2020.

State school support staff received a pay rise of 2.75% from 1 April 2020. Staff with less than 5 years-service also received an additional day annual leave.

This follows an increase of 2% increase in April 2019, with lower-paid staff receiving a larger increase as part of a restructure of the pay scale.

NEU submitted evidence to the STRB for an increase of 7% for all teachers in England. See STRB: Teacher Pay: Repair the Damage.

Defend the Teachers’ Pension Scheme

The Teachers’ Pension Scheme [TPS] is a fundamental part of a teachers’ remuneration. Pension is deferred pay. For many, it is a contractual right and not something that can be simply universally changed by your employer.

NEU members have successfully persuaded their employers not to leave the TPS in 49 school consultations. The key to success? Acting collectively as the NEU.

Up to March 2020 [before the coronavirus hiatus], NEU members requested strike ballots in 37 independent schools: 23 indicative; and 14 formal ballots. Often the show of resolve is sufficient. Members have taken strike action at St Edwards, Oxford; Millfield, Somerset; and Colfe’s, London.

Be prepared. Read the NEU guidance on protecting your TPS.

General guidance

Fundamental term of employment

Pay is a fundamental term of employment. The NEU believes that members should have the right to negotiate their pay, not only to be consulted or just informed.

Meaningful consultation is based on having all the relevant information, in good time, to enable staff to ask pertinent questions and to make informed decisions.

Meaningful negotiation is based on having the all relevant information, in good time, to enable staff representatives to discuss matters with employer representatives with the aim of reaching agreement.

Strength in numbers

As trade union members, we know from experience that our interests are best served by acting collectively. Union membership and pay bargaining enhances pay. And it is not just us who say it!

Andrew Haldane, Chief Economist, Bank of England, stated in June 2017,

“...there is a clear wage premium associated with trade union membership…”

Follow the Bank of England’s steer – get organised!

Members should meet to discuss pay, determine priorities and set a plan of action. The following checklist can aid the discussion.

Organising checklist

  • Does your school have a pay policy? Does it need improving?
  • Do you have negotiating rights? If not, consider recognition of NEU.
  • Does the employer provide enough information to staff?
  • How strong is the NEU collective voice?
  • Is there a NEU rep team?
  • Look to strengthen staff voice by recruiting more colleagues into NEU

Follow the Bank of England’s steer – get your union recognised!

Employees have the legal right to collective representation and to negotiate their main terms and conditions, under the Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the Employment Relations Act 1999.

NEU recommend securing collective rights through the recognition of NEU.

If you only do one thing – submit a pay claim

Regardless of whether you enjoy statutory collective rights, NEU recommends that members submit a pay claim. It doesn’t need to be sophisticated, as simply being proactive changes the dynamic and can make an impact.

Some schools link pay to the state sector, often paid at a premium, in which case, you will be indirectly represented in the NEU negotiations with the Government.

Pay deal components

It is important that NEU members submit a pay claim. Some things to consider:

  • Cost of Living
  • Recruitment and Retention
  • Motivation and Morale
  • Performance
  • Affordability
  • Market

A cost of living increase below RPI inflation is in effect a cut in living standards.

Recruitment & retention

Education is a people business. The key to success is recruitment & retention. Parents expect quality staff and a consistency of staffing.

Fewer graduates are being attracted to the profession, as pay has fallen in real terms for the past ten years. The retention rate continues to deteriorate with more than 1 in 4 newly qualified teachers leaving within 3 years.

Shortage of teachers and support staff in independent schools

Some independent schools are experiencing problems recruiting, particularly in maths, science, and languages, and in support staff areas.

Part of the problem is that salaries have not kept pace with inflation, and the ever-increasing workload means that many teachers are retiring early.

Modern languages have been hit by Brexit. The perception that Britain is less welcoming has adversely affected, language teachers and teaching assistants.

Property prices and the difficulty for young teachers to get on the property ladder.

Motivation and morale considerations affect pay offers. Regardless of the economic situation private sector employers have been historically unwilling to offer low pay awards for the fear of appearing mean.

Performance

There is good reason why employers should remunerate staff well.

What makes a successful school?

“Above all, it is the hard work of the talented staff…. both teaching and non-teaching staff.”

Barnaby Lenon, ISC Chairman.

As Richard Cairns, head teacher of Brighton College, has said independent schools attract "outstanding teachers… by offering enhanced terms and conditions and smaller class sizes". "These cost money and, inevitably, this is reflected in higher fees. Any school that thinks it can stint on teachers' salaries and class sizes while still offering a first-class education is kidding itself.”

Affordability is sometimes cited to deny a proper cost of living award when, more often, money is available but the employer prefers to spend it on something else.

If the employer argues they can’t afford an award that matches inflation, then ask to see the figures. Most independent schools are registered charities, with accounts in the public domain on the charity commission website.

The right of disclosure of relevant information is a statutory right of employees where their nominated trade union is recognised. Even if you don’t enjoy this statutory right you could make a request in line with the ACAS guidance.

The market rate can also affect what is offered. This may be the local market of competitor schools, the state sector, or general private sector.

Bargaining and Total Reward

There are other areas of reward, such as family-friendly policies or enhanced sick leave and pay. For example, NEU reps in one HMC school negotiated a significant enhancement of maternity provision from the bare statutory minimum.

Consolidated lump sums

Combining percentage increases with minimum lump sums can benefit the low paid because a percentage figure increase can often be very low.

Be wary of unconsolidated lump sums, as they are paid on a one-off basis and not added to your basic pay for future pay increases or pension contributions.

The Living Wage

NEU recommends that members consider including the request that the employer pays the Living Wage, as set by the Living Wage Foundation. This can make a significant difference to our lowest paid members, catering and cleaning staff.

The hourly rate is set independently in November. From November 2019, the rate is £10.75 per hour in London and £9.30 in the rest of the UK.

NEU reps successfully negotiated a Living Wage agreement in the 23 independent schools run by the Girls Day School Trust.

National Minimum Wage and the National Living Wage

From April 2020, the National Living Wage for employees aged 25 and over is £8.72 per hour. For employees aged 21 to 24, the Minimum Wage is £8.20.

The indices of a financially healthy independent school

To collective bargain effectively, you need to see the finances. When an employer says that they cannot afford a higher increase, often it is that they would prefer to spend the money on something else!

To avoid drawing conclusions from minor variances, it is advisable to look at trends, so request information over a period, say, five years.

Total income & expenditure

The biggest item on a school’s budget is staffing costs. The ISC estimates that the average independent school spends approximately 65-70% of income on salaries.

Pupil numbers

Pupil numbers rising is a healthy sign. A dip in numbers may not mean that the school cannot afford a cost of living award as lean years should be offset with fat. A fall in pupil numbers might also have been offset by a fall in staff numbers.

School fees outstrip wage increases

The average school fee increase in has outstripped wage increases and RPI for many years. The ISC census 2020 reports the average increase as 4.1%: in day-schools 4.4%; day pupils at boarding schools 3.8%; and boarders 3.1%.

Synchronising your pay claim with the financial cycle of the school

NEU members submit a pay claim around February for the following September to maximise the chance of influencing the budget. The finance committee draft a budget February/March, for the main board before Easter.

If bargaining is conducted later, there is still scope for negotiation. It is likely that a provisional budget will have been set, including contingencies.

Salaries for teachers have around 37% on-costs: NI 13.8%; pension 23.6% [TPS]. A cost of living increase of 3%, equates to an increase of 3.9% for the school budget. On costs for support staff are less, reflecting less generous pension.

There is a pay correlation between the age of pupils and the age of staff. Salaries in pre-prep being the lowest and the senior the highest.

Other sources of finance apart from fees

Some schools raise significant funds from parents, alumni; summer schools and after school clubs; weddings & other lettings etc.

Reserves & surplus

The Independent School Bursars Association recommends that a school runs an annual 10% surplus and a term's money in reserve. Many schools have much less.

Contacts

Every NEU Regional Office has a senior regional official for bargaining who can offer local advice. For general advice on pay claims, contact John Richardson, NEU national official, independent sector, John.Richardson@neu.org.uk

Further information

There is sector information on the NEU independent sector webpages, including the annual NEU Pay Survey, coronavirus FAQs, trade union recognition etc.

NEU Starter for ten: Collective Bargaining is the ideal starting point for busy members working in the independent sector.

The NEU pay toolkit contains a range of materials to help reps/members in all sectors on common pay issues but also includes model policy on pay.

NEU advice and guidance on defending your TPS pension is on the NEU webpage  Protecting independent school teachers’ pensions