A recent past pupil excitedly dropped me a line over the summer about their first job – a graduate scheme for a successful company in one of the UK’s best cities. They were particularly happy that they were paid a salary, with a 3 per cent contribution into a pension.
Many who work outside teaching would consider the current levels of TPS employers’ contributions (if they know about them), as remarkable. A now confirmed increase takes the contribution to 28.6 per cent from April 2024, representing a relative 21 per cent increase over the current rate of 23.68 per cent. Many school managers are already working on the assumption that a further actuarial review will in due course take contributions well past the 30 per cent mark.
Local Authority schools may currently have little room to manoeuvre, but the funds will eventually need to be accounted for. Independent schools have more options, and several hundred have already left TPS, including some household names. Some have withdrawn completely to defined contribution schemes, others to phased withdrawals.
“Parents would be amazed at how much of their fees goes on pensions.”
There are various stakeholders who are likely to have different opinions. Teaching staff, understandably, want the best package possible. Heads want to walk the tightrope of keeping staff morale as high as possible (in a world where teaching is often not the sunlit career destination it deserves to be) while balancing the budget. Pupils have no interest, while parents would generally be amazed at how much of the budget, or their fees, goes to pensions.
Governors of an independent school are required to think long and hard about best use of their charity’s assets. Is it right to use a likely hundreds of thousands of pounds each year on ever more generous pensions, while the sports hall roof needs repairing and the school minibuses are coming to the end of their useful lives?
“A good replacement offer needs to be brought to the table.”
Schools which seem to have managed withdrawals successfully seem to have had a few things in common: the process has been driven by the governors, not the management (most of whom will be in TPS themselves). Also, staff need to feel that the schools have engaged in a meaningful consultation process and presented a robust business case.
A good replacement offer needs to be brought to the table; staff are helped to understand pensions (it is remarkable how few do), their benefits, and ways of adjusting them over the years to best suit their personal circumstances.
“Schools that continue in TPS will need to find a large amount of money to do so.”
At the same time, it has proved crucial that many teachers, with the inevitable doubts and emotions eventually put aside, clearly value the intrinsic rewards in working for their particular school.
Schools which continue in TPS will need to find a large amount of money to do so. Some very wealthy independent schools will withdraw for philosophical reasons, others will stay after similar processes but with different outcomes. It is for each school to consider its own circumstances and protect itself, its reputation and its assets accordingly.
Given the black holes in public finance and the economic issues both today and on the horizon, it is surely inevitable that local authority staff in TPS will eventually face the same issues as their colleagues in independent schools.
Their schools, academies or authorities will not be able to afford these rises for ever (especially when, like the latest one, they are arriving mid-year, with budgets already set). They will have the same choices to make, affecting class sizes, facilities, or the curriculum.
“Even state-funded schools will not be able to afford these rises for ever.”
My young friend with the 3 per cent pension (national minimum for workplace pensions) would struggle to understand that and wonder what all the fuss is about withdrawing from TPS.
But then the governor, head, or parent, may also look at the Labour Party’s line in the sand about VAT on independent school fees, however badly thought out, unaudited and morally unsound it may be. He or she may equally wonder why the fuss about TPS and think their time might be better spent planning how to avoid passing on an expected and potentially ruinous 16 per cent rise in costs to parents.
And in an ideal would, the education unions would wake up quickly to the fact that a new government introducing such a VAT policy would be a much greater threat to the jobs of tens of thousands of their members than TPS, and something to really make a fuss about.
