School teachers face changes in pay structures and performance management

In November 2003, the School Teachers’ Review Body made recommendations which resulted in teachers’ first multi-year pay award. Its latest report, published in March 2004, proposes significant changes in salary structures and performance management. The changes affect half a million teachers in England and Wales.

For the last 13 years, the School Teachers’ Review Body (STRB) has made recommendations to the government on pay increases and allowances, changes in salary structures and other matters referred to it by the education secretary. Recently, the range of issues on which the government has sought guidance from the STRB has increased significantly, reflecting the greater urgency and scope of its agenda for public service reform. The STRB covers half a million teachers in England and Wales.

In its report published in February 2003 (UK0302105F), the STRB requested the parties to discuss a number of pressing and longer-term issues on which some common ground might be reached before they submitted separate evidence later in the year. The Easter 2003 annual conferences of the teachers’ trade unions were dominated by criticism of the impact of the 2003-4 funding arrangements on school budgets, and the threat of job losses in some schools (UK0305101N). In the light of these pressures, in July 2003 the education secretary asked the STRB to report in November on a number of key issues that most directly affected school costs and budgets, and to report on related matters in a second report in early 2004.

The STRB’s November 2003 report

The November 2003 STRB [report](http://www.ome.uk.com/downloads/strb 2nd.pdf) made clear recommendations on two important issues: whether there should be a multi-year pay award; and the level of the proposed pay increases.

In its previous report, the STRB had argued that it would be premature to recommend a move away from the usual one-year award, and asked the parties to consult on the issue. After examining their evidence, it recommended a multi-year award, arguing that this would provide greater certainty to schools and local education authorities in planning their budgets and expenditure, and that relatively stable and low levels of inflation offered a favourable climate for the change.

After considering the evidence on teacher recruitment and retention, the economic background and inflation forecasts, the STRB recommended that the salary levels of most classroom teachers should increase by 2.5% from April 2004, and by 3.25% from April 2005 to the end of August 2006. It also recommended that from 2006, annual pay increases should be implemented in September each year, at the same time as incremental and performance pay increases take effect. The STRB argued that this change would 'enhance the clarity of the pay and reward structure for teachers' and help schools plan their budgets more easily.

The report also addressed two other issues requiring urgent clarification and reform, on which it requested consultation between the parties, so that their subsequent evidence to the STRB could provide a more adequate basis for future recommendations:

• management allowances. Almost half of all teachers receive extra payment for accepting additional responsibilities. The STRB noted that the implementation of the January 2003 national agreement, Raising standards and tackling workload (UK0305101N), would change the way that schools manage their responsibilities. Management allowances should thus not be paid to teachers for undertaking tasks that ought to be carried out by non-teaching staff. On the basis of evidence from research that it had commissioned, the STRB reported considerable inconsistency in the use of management allowances in schools, and recommended that the parties discuss ways in which a transition to a reformed system could be handled; and

• progression of teachers on the upper pay scale. In successive reports, the STRB has argued that it expects teachers to progress at different speeds on the five-point upper pay scale. So far, these expectations have not been met, 'partly because of a widespread unease about linking pay and performance management and partly because many schools have found it difficult to make rigorous judgments about their teachers’ readiness to progress'. The report recommended that consultations take place urgently to develop a new framework and criteria for progression by the beginning of 2004.

Reaction to the report

The education secretary, Charles Clarke, responded positively to the report, arguing that it provided the basis for a new era of stability in teachers’ pay for the period to August 2006, 'based on fairness for teachers and affordability for schools'. Whilst he accepted most of the recommendations of the STRB report, he decided to stage the 3.25% pay increase from April 2005, and to defer the proposed introduction of higher increases for outer London pay and higher starting pay for teachers in the whole of London from April to September 2005. These and other adjustments to the timescale of some of the STRB recommendations added to the disappointment or anger expressed by the leaders of the teachers’ trade unions. They argued that the two-and-a-half-year pay settlement was lower than both the current rate of inflation and the increase in average earnings.

Despite their criticism of many aspects of the first multi-year pay agreement for teachers, most unions - the exception was the National Union of Teachers (NUT) - accepted an invitation from Mr Clarke to participate in a discussions to resolve the serious problems concerning the arrangements for the progression of teachers on the upper pay scale. In early January 2004, to the surprise of many commentators, a draft agreement was reached between the government, employers and general secretaries of five trade unions representing the majority of teachers and head teachers. Under the terms of the agreement, upper scale point 3 - to which the first cohort of eligible teachers could apply in 2004 - would become the salary to which all 'good' classroom teachers can aspire. Upper scale points 4 and 5 would be abolished and, in their place, a new 'excellent teachers scheme' would be established. This would enable teachers on upper scale point 3 to apply, and 'to demonstrate that they have distinguished themselves above other classroom teachers at that level'.

The education secretary argued that the draft agreement supported the commitment of government to provide 'certainty and affordability for schools, whilst ensuring that the highest rewards go to our best classroom teachers'. He said that it was also an example of the 'social partnership approach'- a positive engagement of the government with trade unions and employers. These sentiments were shared by all of the trade union leaders who participated in the negotiations. The most positive views were expressed by the leaders of the two unions for head teachers, whose members had feared an intractable dispute over the uncertain criteria and funding arrangements covering the progression of teachers on the original five-point upper scale. However, the NUT strongly criticised the outcome of the talks.

The STRB’s March 2004 report

Following the draft agreement, the education secretary wrote to the chair of the STRB setting out further issues on which he sought its recommendations. The STRB’s [report](http://www.ome.uk.com/downloads/12_3_04 STRBcomplete.pdf), published on 16 March 2004, supported the main proposals of the draft agreement, and identified ways in which performance-related pay for teachers should be further developed.

• First, the report agreed that points 4 and 5 should be deleted from the upper pay scale, and that a new 'excellent teacher scheme' should be established. Applicants to this new grade would be restricted to classroom teachers three years after they had reached upper scale point 3. National criteria should include an element of external assessment and a programme of study leading to an appropriate qualification, to ensure that 'only the very best teachers can achieve the new status'. In the discussions on the draft agreement, it was estimated that this might amount to about 20% of the teachers eligible to apply.

• Second, the report recommended that there should be a more explicit link between performance, professional development and progression for teachers on the main pay scale. From September 2005, on the basis of a teacher’s performance and development, head teachers should decide and record whether he or she has reached the standard required to merit an increment. Where performance is judged to be outstanding over a period of two years, it should merit a double increment, and where performance falls below the required standard, the increment should be deferred and an improvement plan should be agreed. The increment would be backdated if a mid-year review showed that progress had been made. The STRB argued that whilst the current system already includes performance-related progression on the main scale, 'few, if any, teachers receive double increments or have an increment deferred'. It also recommended that, over the next 18 months, all head teachers should have appropriate training on the links between teachers’ pay and performance across all of the pay scales.

Commentary

The STRB addressed several other issues in its two reports. Most controversially, the March 2004 report argued that there was a need to make the pay system more sensitive and responsive to local labour market conditions, so that the large variations in vacancy and turnover rates - and in recruitment and retention problems - could be tackled. It outlined proposals for a new system of pay bands, on which it requested the views and evidence of the parties by September 2004. Given the unresolved differences between the trade unions, employers and government on aspects of the performance management regime, and the practical problems in reforming the system of management allowances arising from the phased implementation of the national agreement on workload, the local pay proposals produced almost unanimous hostility from trade union leaders. This was only partly assuaged by the surprise announcement in the government's budget statement of 17 March 2004 that UK education expenditure would increase by 4.4% in real terms (from GBP 59 billion to GBP 77 billion) in the three years to 2007-8. (David Winchester, IRRU)