July Budget, Coasting Schools and Teachers Pay

As another school year draws to a close, we consider the announcements made by the new government and how they might impact on schools and academies next year.

July Budget

There were no new announcements in the budget solely related to schools and academies, other than funds to expand cadet units in state schools. Other announcements directed at education related to higher education, see below:

• Student maintenance grants to be replaced with loans from 2016-17, to be paid back once people earn more than £21,000 a year.
• The maintenance loan will increase to £8,200.
• New university professorships to be created to mark the Queen's 90th birthday.
• £50 million to expand the number of cadet units in state schools.

A number of wider announcements will impact upon schools - these include, but not limited to:

• New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years. Low Pay Commission to advise on future changes to rates.
• Personal allowance, at which people start paying tax, to rise to £11,000 next year. The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax.
• The point at which people start paying income tax at the 40p rate to rise from £42,385 to £43,000 next year.
• 1% public sector pay rise to continue for next four years.
• An increase in insurance premium tax to 9.5% from November.
• National Insurance employment allowance for small firms and charities to be increased by 50% to £3,000 from 2016 ( see www.gov.uk/employment-allowance for details of the allowance).

A full summary of the budget can be found here.  www.bbc.co.uk/news/uk-politics-33440315

DfE Non School Budget Reduced

Prior to the budget the Treasury announced a cut (savings) of £450m to the DfE’s non-schools budget. How will these be made? A DfE spokesperson said: “These savings will come from a variety of measures including expected departmental underspends in demand-led budgets, efficiencies and some small budgetary reductions.” The budgets for schools and academies in 2015-2016 will be maintained in cash terms. Though as senior leaders and governors will be aware salaries will rise typically by 1% (see below), pensions costs are increasing and changes to National Insurance next year will also increase costs. To achieve the aims in your School Development Plan you will need to be more effective in how you procure and uses the resources available to you. Academies need to be aware that if they are proposing a deficit budget, they must notify the EFA immediately (the Academies Financial Handbook states within 14 days).

Coasting Schools

Education Secretary Nicky Morgan has defined “coasting schools”. Schools eligible for intervention will be those which fall below the new coasting level for 3 years.

• Secondary Schools will fail the coasting level if in 2014 and 2015 they fail to ensure 60% of pupils get five good GCSE grades and an above average proportion of pupils make acceptable progress. From 2016 the level set will be based upon “Progress 8” – the government’s new accountability measure that shows a child’s progress between the end of primary school and their GCSEs.
• Primary Schools will fail the coasting level if less than 85% of children achieve a level 4 in key stage 2 tests in reading, writing and maths and the school has a less than median proportion of pupils making expected progress between key stage 1 and key stage 2.

The new coasting levels are in addition to existing floor standards – which use the same criteria with a lower threshold (40% not 60% gaining 5 GCSEs or 65% not 85% achieving level 4). Failure to reach the floor standard may already result in intervention in the school. Schools Week reported that looking at the last 3 years data, almost 1,200 schools would be labelled as ‘coasting’, including 4 rated as outstanding by Ofsted. See www.schoolsweek.co.uk for further details.

Discretionary Pay For Teachers

The latest pay and conditions for Teachers now only prescribes pay ranges with a minimum and maximum amount. DfE documentation no longer refers to points within the range, though schools and academies may adopt fixed pay points as a basis for teachers progression. For 2015/16 a 1% rise has been adopted to statutory minimum and maximum pay ranges in the framework. Two exceptions being a 2% increase in the maximum pay in the main scale and no increase in the maximum of the leadership pay range. Any teacher previously on the minimum of a pay range must receive a 1% rise to remain in scale. Other increases will be through performance management. Schools and academies will need to issue salary statements once each teacher's pay has been determined. Guidance states that statements should be sent out by the end of October. Those schools and academies using SBS Online are able to produce salary statements for all staff – whilst ensuring their budgets keep track of all pay changes. For assistance with this contact our Service Desk – 0845 300 8179 • option 2.