Chickens coming home to roost

The Education Policy Institute (EPI) have helpfully pulled a lot of information about teacher supply – some of the data has already appeared on this blog over the past few years – in a new pamphlet. The teacher labour market: a perilous path ahead? https://epi.org.uk/wp-content/uploads/2018/04/EPI-analysis_Teacher-labour-market_2018.pdf

I am not sure that I agree with their conclusions about paying some teachers more than others. However, it is an inevitable solution offered by free market economists, where changing the price offered for labour is the mechanism for dealing with shortages and surpluses. Interestingly, EPI don’t suggest cutting the pay of PE teachers. I assume they believe the millstone of student debt and no guarantee of a teaching post should be enough of a disincentive. However, it would be one way to provide schools with the cash to pay others more.

I assume that Jeremy Corbyn’s Labour party would eschew the free market approach and go for the alternative strategy of state controlled rationing. Such a strategy was popular after Second World War, when the Ministry of Education used to issue an annual circular telling local authorities how many newly trained teachers they could employ. In those days, the issue of subject expertise was less of a concern as, apart form in the selective and independent sectors, most schools employed class teachers rather than subject specialists.

The problem with the free market approach, as suggested by EPI, is the assumption that teaching can outbid the private sector when it comes to pay. This was presumably also behind the thinking of the Gatsby Foundation paper http://www.gatsby.org.uk/education/latest/examine-pay-of-early-career-shortage-subject-teachers-to-effectively-tackle-retention-in-english-secondary-schools of March this year that said ‘a data simulation to measure what the impact of a 5% pay increase for early years maths and science teachers in England would have been, had it been introduced as policy in 2010. The report reveals such a policy would have eliminated the shortage of science teachers experienced since 2010.’ I wonder whether that would have been the case or whether private sector employers would have matched the pay increases and offered better non-pay conditions of service.

Where EPI is correct is to cite a perilous path ahead for the teacher labour market. Tomorrow should see the latest UCAS data on applications and acceptances for 2018 teacher preparation programmes. I doubt we can expect much good news. As the EPI pamphlet points out, and in doing so reinforces a point made on this blog, ‘there is still a chance training providers will be able to get close to meeting DfE’s recruitment targets, but they might need to accept nearly all applicants.’ As I have said before, what does that mean for the quality of applicants being offered places if almost anyone that applies can be taken onto a teacher preparation course?

Increasing the time spent on sports and PE in our secondary schools and reducing the time on separate sciences taught by specialists before Key Stage 4 might upset some departments in Russell Group universities, but it might also make for a healthier school population. Looking at the curriculum that can be staffed might be a better use of limited resources than trying to decide each year how much to pay teachers with different skills and expertise. But, if the government does go down that path, they might need to pay the highest salaries to teachers of business studies.

 

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Top salaries in higher education

In 1995 the National Audit Office prepared a report for the Public Accounts Committee on severance payments in the publicly funded education sector after a furlough about the size of such payments. The current debate about the salaries paid to vice chancellors has an echo of the earlier concern with the methods used at the time to fund severance payments to top staff in our universities. Of course, as with most companies, there are now better governance arrangements and independent remuneration committees, designed to prevent the very political row that is currently underway about how much vice chancellors should be paid?

The business case is probably along the lines of that in order to attract top quality leaders you need to pay top salaries competitive with other parts of the world. This argument has been used by UK plc companies for many years, so the business people on remuneration committees can hardly object if university leaders advance the same argument in an increasingly global marketplace for higher education. There is also another argument that by becoming a vice chancellor you may forgo the success in your academic field, whether a possible Nobel or similar prize; a top selling text book or even just the satisfaction of teaching and research in your chosen field.

The alternative view that nobody in public service should be paid more than the Prime Minister usually ignores the non-salary benefits of a house in London and in the country and a non-contributable final salary pension that make up the total remuneration package of the leader of the government and just concentrate on the basic salary.

Where vice chancellors have probably made a mistake over the past few years of pay restraint is not to adhere to the same level of salary growth as the rest of their staff. If you are going to widen the differentials you need a cast iron public relations exercise in advance; to do so after the event always looks defensive and self-serving. Any head of human relations that doesn’t make that point clear probably isn’t reading the runes correctly.  Just saying the job is harder or more demanding isn’t enough?

The same is true for Multi-Academy Trusts where salaries of chief officers have risen over recent years, as I pointed out in a previous post ‘What is a CEO worth’ some time ago. The contrast between the pay of the chief executives of two of the larger MATs is around a couple of hundred thousand pounds. Is one underpaid?

The really interesting point with the university vice chancellors’ pay story is, however, that this time around, unlike in the 1990s, Ministers haven’t sought to pass the issue to the NAO and then the PAC, but have waded in directly. I assume that they see this as a way of diverting attention from other more concerning issues and putting the government on the side of the lecturers. Realistically, they are trying to close a stable door sometime after the horse has bolted and are only likely to catch universities that hadn’t adjusted their VCs pay to market conditions. Perhaps there should be performance related pay for senior university staff, but as large institutions they probably have to pay the heads of their professional service department competitive salaries and would you want the chief finance officer paid more than the vice chancellor? An interesting question.

 

 

Public service and public pay

As schools across the country return for the start of their new school year, and all that is associated with that annual event: the end of summer and often the return of good weather; increased traffic congestion on the roads and the ending of the seemingly endless adverts for school uniforms, the issue of pay is dominating the headlines once again.

Earlier today I was on BBC radio Kent in a discussion with the County NUT branch secretary (or should that now be The EU Secretary for the Education Union?) about why the county has so many vacant headship positions. Salary came up as one possible reason. In days of yore, whether Arthur Jarman was a senior officer for the NUT, he always used to remind me that the NUT had more head teacher members than any other association. I don’t know whether that is still the case as a result of many teachers retaining membership of both the teacher association that they joined on entering the profession and also joining one of the associations for school leaders when they reached their first leadership post.

During our discussion on-air we disagreed about how well paid primary head teachers are today. I don’t think many of the heads, especially heads of smaller primary schools, are well paid for what is required of them. Those that have to teach and well as lead the school have two very distinct jobs for which they are often not well rewarded.

We did agree on the question of the pay of some CEOs of MATs, something I have commented on before on this blog. We didn’t have time to discuss whether the one per cent pay cap may finally be on the way out. It will be interesting to see what the Secretary of State will say in the remit letter to the STRB in relation to their consideration of a pay award for 2018? The past two STRB Reports have been expressing issues with the continued effect of the pay cap but have remained faithful to their remit.

At the school level, I am surprised that more use hasn’t been made of recruitment and retention payments that were popular in London during earlier recruitment crises. Golden hellos were also used in the past, along with relocation funding for those moving into an area and requiring to set up a new home.

These days, we can no longer track just the 151 local authority recruitment offers, but must also look at what MATs are offering. Do Regional School Commissioners have a role in making sure potential staff know what is on offer? TeachVac is happy to provide a space for this on its website and has started by identifying Suffolk’s recruitment link on TeachVac’s new blog (www.teachvac.wordpress.com).  Why Suffolk, just because they asked me last year to come and talk about recruitment challenges to their head teacher conference.

In the short-term, offering to pay the fees of all graduate trainees and paying a training bursary to all might aid recruitment even if the Treasury cavilled about the deadweight cost of such a move.

 

Most women earn less than men in teaching

With the revelation of top salaries at the BBC showing such large differences between what is paid to men and women in the best paid positions in the corporation I thought it worth looking at the data about salaries for teachers in state-funded schools in England. The details can be found in the School Workforce Census taken every November. The latest information is from November 2016 https://www.gov.uk/government/statistics/school-workforce-in-england-november-2016 The data is only as good as that submitted by schools and tends to lump part-time and full-time workers together in the same table. As there are probably more women working part-time in the older age-groups this may have some effect on the average salary in some age groups. In total, there were around 110,000 part-time teachers and school leaders working in schools in November 2016, not counting short-term supply teachers that are excluded from the data.

Young women under the age of 30 earn on average more than their male compatriots. The exact amount of the difference varies between sectors and type of school, but overall, women under 25 average £400 more per year than men and those between 25-29 £500 more in salary. That is the point where the picture changes and men start earning more on average than women. By their late 40s, women are, on average, earning some £5,400 per year less than men. Men average £46,700 and women £41,300 per year. Neither group is earning enough to support a mortgage on a house or flat in many parts of the country, even if you were to add in the London salary uplift.

Interestingly, there is a similar differential in favour of men among head teachers. Although there are more than 10,000 women head teachers in primary non-academies, compared with fewer than 4,000 men, their average salary is £1,800 lower than for men. The median difference in head teacher salary is even greater at £2,100. However, as salary is usually linked to school size this may mean more women are heads of the many small primary schools still to be found across England. Whether the National Funding Formula will make many of these small schools financially unviable and affect the promotion opportunities of women teachers is an interesting question.

Among heads of secondary academies, there are 1,600 men compared with 1,000 women. Men earn more in all age groups with average salaries for male head teachers in their 50s exceeding £100,000 and peaking at £109,800 for those in the 55-59 age group. Women in this age group average £105,300, when serving as a head of a secondary academy.

Somewhere around 1,300 head teachers were earning more than £100,000 in November 2016, with another 800 where the salary was unreported that might contain additional high earners. Of these high earners, there were 600 teachers earning in a range from £110,000-£200,000. Salaries above this upper level were regarded as mis-reported. Some might be executive heads of Multi-Academy Trusts that also combined that role with head teacher of a particular school. More clarity on this point would be helpful in encouraging schools to complete the census correctly.

 

 

Bursaries, fee remission or a training salary for all?

Why is paying a bursary to a trainee teacher seem as potentially having a deadweight cost attached to it, but paying a salary to a trainee army or navy officer does not seem to be regarded in the same way? The Education Policy Institute, where ex-Lib Dem Minister David Laws is Chief Executive, has just published at short review paper on teacher recruitment into training and other teacher supply issues https://epi.org.uk/wp-content/uploads/2017/07/EPI-Analysis-Teacher_Supply.pdf  The Review say that bursaries are not efficient because, when they are increased in amount, this extra has to be paid to everyone and not just to those extra trainees it would entice into the profession. I seem to recall a parable In Chapter 20 of St Matthew’s Gospel that deals with an analogous situation.

As might be expected by a body whose chief executive was associated with the famous Orange book, this issue of paying the same to everyone reads as if it may be troubling for the authors of the review and they discuss alternative and more efficient scenarios to bursaries, including the student fee forgiveness package promoted in the Conservative Manifesto, but presumably a casualty of yesterday’s funding announcement.

Personally, I favour the situation that brings trainee graduate teachers nearest to their colleagues in other public services, many of whom are paid during training. The EPI review doesn’t address the issue of fairness between the different routes into teaching; indeed it is very thin on a discussion of why higher education is still proving so attractive to applicants and it is the school-based routes that seem to be bearing the brunt of the fall in applications this year.

The other interesting observation in the review is that the pupil teacher ratio in secondary schools will worsen from 14.5:1 in 2016/17 to 16.0:1 by 2026/27. Much of this apparent deterioration will just be a reversal of an improvement achieved while pupil numbers were in decline in the secondary sector and some of the change can be brought about by relatively small changes in group sizes and Key Stages 4 & 5 where periods of generous funding always allow for smaller classes to be operated than in less generous periods for funding. Nevertheless, an expectation of a deteriorating pupil teacher ratio is not a great selling point for attracting new entrants into the profession or retaining those already there.

To me it reads as if the unidentified writer of the EPI review would have liked a real free market in salaries, both between schools and within schools between teachers, as if this had never been the case in the past. Within the tightly managed central control of salaries, (even though funding of schools was at the direction of local authorities), that existed in the post-war period up to the introduction of local management of schools after the great Education Reform Act of the late 1980s, there were marked differentials between promotion opportunities in the primary and secondary sectors and it was easier for teachers in some subjects to achieve additional payments if the school know that they would be difficult to replace. To that extent the market principle of supply and demand probably worked at least as effectively as they do at present.

Indeed, one interesting question is why there hasn’t been a return to the use of recruitment and retention allowances by schools, a favoured device during an earlier recruitment crisis.

 

What is a CEO worth?

Are salaries paid to the heads of some multi-academy trusts too high, as Sir Michael Wilshaw might seem to think  from the tone of his letter to the Secretary of State or perhaps actually too low for the level of responsibility that they have to undertake. What is clear is that executive heads and chief executives of MATS do seem to think they deserve to earn more than those they manage. This seems like a sound business principle, but is it really?

There is another principle that relates pay to the nature of the work. Is taking the strategic lead in an organisation more important than running an operating unit such as a school? This is a moot point. Perhaps, the justification is that you need good talent and such individuals won’t be prepared to step up from headship without a pay rise. I would have some sympathy if the job had been offered at a lower salary first, but all too often it isn’t: in some cases it isn’t even put out to open competition just decided internally within the MAT. Can that ever be the right thing to do with public money?

With head teachers often subject to dismissal if a school fails an Ofsted inspection, does the same happen to executive heads and CEOs of MATs? If not, why not? We shall no doubt see what happens in response to this Ofsted Report.

Now the alternative view is that in London, at least, middle managers in businesses not much larger than the average primary school in staffing terms can earn six figure salaries and their CEOs even higher amounts and both groups can have bonus payments and share options on top that will pay out handsomely if the company does well. Should schools be competing with these salary levels?

I note that in response to Sir Michaels’ letter to the Secretary of State he pulls no punches. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/506718/HMCI__advice__note_MAT_inspections____10_March_2016.pdf The letter to Mrs Morgan says:

“This poor use of public money is compounded by some trusts holding very large cash reserves that are not being spent on raising standards.

“For example, at the end of August 2015, these seven trusts had total cash in the bank of £111m.

“Furthermore, some of these trusts are spending money on expensive consultants or advisers to compensate for deficits in leadership. Put together, these seven trusts spent at least £8.5m on education consultancy in 2014-15 alone.”

Now, this blog has complained in the past about schools holding large cash reserves that should be spent on teaching and learning. One might also ask, what the Regional School Commissioners have been doing in holding academies to account.

Finally, there are currently 151 local authorities in England with a Director responsible for education. In most cases they have other responsibilities as well. If each were paid £200,000 – more than they actually are – the bill would be just over £30 million before overheads. If 18,000 schools were formed into MATs of 20 schools that would be 900 CEOs. If they were paid only £100,000 each the bill would be £90 million. You can do the maths if there are more MATs and higher salaries.

Personally, I thought we were in an age of austerity and I set up TeachVac to offer a low cost option for recruitment to allow more money to be spent on teaching and learning. Frankly, this Report is disappointing news and I hope that there is an urgent review of salaries in education outside of those set by the STRB for teachers and school leaders. We need some clarity of purpose in the use of public funds.

 

Are heads salaries on the rise: What are the consequences for taxpayers?

How come secondary heads cannot fill in forms about their salary correctly? Figures issued yesterday by the DfE show around 300 misreported leadership salaries in the primary sector, but some 400 misreported salaries in the numerically much smaller secondary sector where the misreported figures were split evenly between academies and other maintained secondary schools. According to a footnote in the government tables the misreporting includes any salary above £200,000 per annum.

Now it may be that the census form that collects data on teachers and school leaders and their salaries does not deal well with issues such as executive heads and those head teachers leading federations of schools where others have the courtesy title of head when in fact they are just a head of a school site. If this is the case, then the form needs revision after three years in use. However, if it is heads, and they are responsible for their schools return of the form, fudging their salary and those of others on the leadership team then the schools should be identified and required to provide a correct return.

At the start of this parliament the Prime Minister was keen than no public servants should earn more in salary than he does, but of course he has a rent free house in London and a large country mansion for the weekends in addition to his salary. Nevertheless, one side effect of Michael Gove’s freeing up of teachers’ salary regulations could be that the salaries of heads rise even further and faster in the coming years while those of classroom teachers are held down because of their relative bargaining power.

After more than a quarter of a century of studying the pay of heads, I am aware that the job is a challenging one, and with Ofsted breathing down their necks it can be very like that of a football manager seeking either a place in Europe for their team or striving to avoid relegation. Either way, their job is at risk if they fail to perform well. The tragic case of the Worcestershire primary head reported at her inquest earlier this week shows just how much pressure Ofsted can exert of school leaders. As a result a risk premium is increasingly necessary for many headships. How large that premium should be must be determined by governing bodies, and they need guidelines for what is appropriate.

However, letting the market be responsible for the calculation of salaries in education has another and wider impact on taxpayers in general. At present, many heads are still retiring on a final salary pension, although this will be replaced by an average salary pension for those who retire in the future. As the Teachers’ Pension Fund doesn’t actually exist, and any pension is paid out of  taxation, the burden of the large pensions of up to half the final salary falls onto general taxation. A pension of £50,000 would require the contributions from around 20 NQTs, so if there are now more than say 500 pensioners in the Teachers’ Pension Scheme with pensions of over £50,000 they might require the contributions of 10,000 Newly Qualified Teachers just to cover their pensions. As this number increases so will its share of the income from the Pension Fund necessary to cover the payout even if it is offset by the higher pension payments from those receiving the high salaries.

Teacher compensation regimes are complicated affairs, and the government should be wary of tackling some areas of pay without considering the consequences as a whole. At present governing bodies have the power to set salaries, but without the responsibilities for all the consequences. That said I quite understand why heads want to achieve the highest salary possible in an environment where the ethos of public service seems to reside solely with a Prime Minister who can afford to take such a stance.