Real terms pay for experienced teachers is still likely to be 9 per cent below 2010 levels despite the 5.5 per cent increase agreed between government and unions this year, the Institute for Fiscal Studies (IFS) has warned.
The IFS said its findings could mean ministers may want to consider targeting future pay rises for more experienced teachers amid the teacher shortage crisis across the sector.
The pay rise for 2024-25 will put real-terms pay for new teachers at about the same level as 2010, and “roughly matches” recent growth in private sector wages, the IFS said in its public sector pay report.
The 5.5 per cent recommendation “will at best keep teacher pay from falling further behind the private sector”, the report says, adding that the uplift “is unlikely to improve materially the current recruitment difficulties, and the government may need to find above-economy-wide pay deals for teachers in the future”.
Teachers fall down pay distribution
Teachers had fallen from the 87th percentile of public sector pay to the 81st by 2023 - driven by falls in the real terms pay of those on the upper scale, according to the report.
And teachers and other public sector occupations have still fallen down the pay distribution scale, even when their usually more generous employer pension contributions are taken into account, it adds.
The IFS added that teachers’ low public sector pay distribution position is unlikely to be addressed by the 5.5 per cent increase, and still leaves classroom teacher pay “relatively low” compared with jobs requiring similar skills and experience.
The IFS said recruitment and retention challenges in the public sector will likely lead to pressure on the government for pay to rise over the next Parliament.
The National Foundation for Educational Research warned earlier this year that the Department for Education was at risk of under-recruiting secondary trainee teachers for 10 out of 17 subjects.
Subjects such as physics, maths and music continue to struggle to recruit enough secondary teachers.
The teacher vacancy rate in November 2023 was 0.6 per cent, double the rate pre-pandemic.
Addressing the recruitment and retention crisis
The IFS suggests that it “may take some targeted additional spending on pay or through other means” to address the challenges.
The DfE introduced some targeted retention payments under the previous government.
Under the scheme, early career teachers working in schools in the most disadvantaged areas who completed initial teacher training could receive a maximum of £12,000 over two years.
The department also previously announced an increase in teacher training bursaries for shortage subjects such as chemistry, computing, maths and physics.
Public sector pay compression
On average, public sector pay has compressed in recent years, says the IFS report, meaning that the gap between the lowest and highest paid in different sectors has shrunk.
In the education sector, there has been a fall in the pay gap between the highest-paid teachers and the average-paid teachers.
In 2007-09, the highest-paid teachers (in the 90th percentile) earned 47 per cent more than the average teacher. In 2021-23, this difference compressed to 41 per cent.
The difference in pay between the lowest-paid teachers and the average teacher has remained roughly the same.
After the 5.5 per cent increase, recommended by the School Teacher’s Review Body and accepted by the government, the starting salary for teachers outside of London will be £31,650.
Meanwhile, the first band of the upper pay scale will increase to £45,646.
All pay bands were agreed to increase at the same rate.
The DfE has been contacted for comment.
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