Academy trust leaders are cutting staff, merging classes, stripping back resources and drawing from reserves to fund a teacher pay award in “the toughest budget round in a generation”.
School leaders have warned repeatedly that a pay award without sufficient funding would be hugely challenging.
Ahead of a final teacher pay offer being announced, and schools and trusts needing to set budgets for 2025-26, they are having to hunt for millions of pounds in savings to fund even the minimum rise expected.
The Department for Education had originally recommended a teacher pay rise of 2.8 per cent for next year. It said it had calculated that schools had “headroom” to afford a 1.3 per cent rise and that additional funding would not be provided.
Despite reports that the pay review body’s recommendation is closer to 4 per cent, many trust leaders have told Tes that their 2025-26 budgets still assume a 2.8 per cent rise. However, some are planning to create slightly more breathing space.
David Clayton, CEO of Endeavour Learning Trust, said schools are facing “the most challenging financial context I’ve seen in my career”.
Warning of school staff job cuts
Two major trusts - the Harris Federation and United Learning - have already warned of potential job losses as a result of unfunded teacher pay rises, and many other organisations will be looking at staffing cuts, according to Stephen Morales, CEO of the Institute of School Business Leadership.
He said: “There is not a [chief financial officer] in the country right now that isn’t immersed in either restructuring or some significant redundancies. It’s the only place to go.”
Sir Dan Moynihan, CEO of the Harris Federation, told Tes last week that budgeting for a 2.8 per cent pay rise leaves the trust with £8.25 million in unfunded costs when the impact of falling pupil rolls is considered. This figure would rise by £3 million for every 1 per cent added to this pay offer.
As a result, the trust, which has 55 schools in London, is proposing to make 40 to 45 redundancies to make up £4 million of these costs, and fund the rest from its reserves.
And Sir Jon Coles, CEO of 90-school United Learning, has said on social media that his trust would have £10.5 million of unfunded costs for a 4 per cent pay award, which would equate to around 400 job losses.
“Sector-wide, that would extrapolate to ruinous harm in the one well-functioning public service: tens of thousands of redundancies,” he said.
‘Toughest budget round in a generation’
Simon Pink, finance director at the Elliot Foundation, which has 36 primaries, said: “This is the toughest budget round in a generation.”
Assuming a 2.8 per cent teacher pay rise leaves the Elliot Foundation with around £1.1 million in unfunded costs for the rise.
However, it has been reported that the School Teachers’ Review Body has recommended a pay rise of nearly 4 per cent, which would increase the trust’s costs by around £500,000, CEO Hugh Greenway told Tes.
School support staff have been offered a 3.2 per cent rise, equating to a cost to the trust of just under £1 million.
Mr Greenway added that the trust currently has no plans for redundancies because it is trying to manage the situation through natural wastage. “But I can’t rule them out,” he said.
While academies do not have to submit budgets to the Department for Education until August, many will be setting them this week so they can finalise their workforce models before the teacher resignation date of 31 May.
Less funding for resources
Adrian Ball, CEO of the Diocese of Ely Multi Academy Trust, which has 39 primary schools, said the trust is having to cut down on staff and “strip out funding for resources”.
“We have already taken the difficult decisions. We have reduced our headcount by around 12 per cent over the last three years to meet falling pupil numbers,” he added. “We have merged classes and year groups at smaller schools.”
One CEO of a medium-sized MAT told Tes they have budgeted for the DfE’s initial recommendation of 2.8 per cent with no additional funding.
“This, combined with a £140,000 shortfall in funding for the national insurance increase, has presented us with a very challenging picture,” the CEO added.
“We are working through scenarios based on a 4 per cent pay award, but I’m not prepared to make decisions that will directly impact on our children and colleagues based on speculation.”
Any further budget costs will need to be funded through reserves, they added, “which will further impact our ability to invest in capital improvements within our schools”.
The CEO said the trust has had to make £700,000 in savings within staffing for 2025-26, though has managed to make the majority of these through redeployment and natural turnover.
The DfE has previously said schools can make up 1.7 per cent towards the pay award by making a 1 per cent efficiency in their budgets.
Exam courses and pastoral support under review
Simon Beamish, CEO of Leigh Academies Trust, said it has budgeted for a 3 per cent pay rise, which has been “very tough” to balance as the trust had to find “several million” to fund it.
Leigh has had to review class sizes across its schools, the courses it runs at GCSE and A level, and various pastoral interventions, as well as slimming down leadership teams and cutting back on support staff roles.
Mr Beamish said he also expects Leigh to have to eat into its reserves next year.
“I would imagine that 3 per cent is in the ballpark of what everybody’s looking at,” Mr Beamish said. “But this may all not be necessary. It’s absolutely appalling that we find out so late in the day, it’s just no way to run the public sector. And this government promised not to do it that way.”
The education secretary had previously said she wanted the announcement of this year’s pay award to be earlier, and said the aim was to announce as close as possible to the start of the new financial year in April.
Schools already on ‘minimum staffing’
Mr Greenway said primary schools are more exposed due to the higher number of support staff they employ. Special schools will also be hit harder by the support staff pay rise.
Warren Carratt, CEO of special-school trust Nexus Multi Academy Trust, said the trust is facing a £2.17 million increase in costs for next year for a teacher pay rise of 2.8 per cent and the support staff rise. This would increase by another £400,000 if the teacher rise was around 4 per cent.
John Camp, CEO of The Compass Partnership of Schools, which has 13 primaries and one special school, told Tes that the trust has budgeted for 3 per cent rise for teachers.
“Schools are operating on minimum staffing levels already,” he said. “We’re as pared back as we can be, particularly around support staff.”
Risks to inclusion work
Mosaic Partnership Trust, which has 12 primaries in the South West, is setting a budget assuming a 2.8 per cent teacher pay increase.
“If it is increased to 4 per cent, that will cost us about £120,000 more than 2.8 per cent on our teaching staffing costs alone,” said Paul Evry, chief finance officer.
“We’re currently at a deficit budget forecast, but we’re hopeful that we will be closer to a balanced one over the next few weeks. Some of our schools are reducing class structures, and we’re pooling things like staff insurance centrally.”
Mosaic has had to look at a small number of redundancies, but will be able to make most of its staffing changes through not replacing people.
Mr Evry said the real problem for Mosaic will be in future years - the trust will be able to maintain its reserves at the recommended level next year, but under current funding assumptions, expects to have to fall below this in future years.
CEO Andrew Best said: “This is all happening while we’re increasingly managing children with really complex needs. Our trust has core principles of inclusion and belonging, but our work around this is made harder with reduced funding.”
The incoming president of the NAHT school leaders’ union told Tes last month that an unfunded pay rise would hit schools’ ability to deliver the government’s inclusion drive.
‘Balancing it was a challenge’
However, Andrew O’Neill, headteacher of maintained secondary All Saints Catholic College, said he was able to set a surplus budget assuming a 2.8 per cent rise for the deadline for maintained schools earlier this year.
“We’ve slimmed some stuff down but we’ve been able to keep our class sizes smaller and our teachers at the same level of workload,” he told Tes. “Balancing it was a challenge, but we have been able to do it through prudent financial management.”
Mr O’Neill said if the rise was 4 per cent, the school would have to look at the impact of this, but added: “The bottom line is, 4 per cent is good for the sector. We need more teachers.”
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