Are teacher pay reforms having an impact on schools?

Growth in pupil numbers as well as the increased costs associated with pensions, national insurance and inflation are putting pressure on school budgets in England. At the same time, school workforce and teacher retention are high on the education policy agenda.

It is against this background that the Government introduced substantial reforms to the pay of teachers in local authority (LA) maintained schools throughout England.

The reforms, which were introduced in September 2013 for teachers and 2014 for senior leaders, were designed to: end pay increases based on length of service; link all teachers’ pay progression to performance; and give schools more freedom to set the starting salaries of teachers. Academies are not required to follow the national pay terms and conditions and are therefore not required to implement the pay reforms, though they may choose to.

Between 2014 to 2017, a team from the NFER, together with colleagues from the University of Bristol, the Institute for Fiscal Studies, and the University of Texas at Austin, USA, undertook a research study for the Department for Education on schools’ responses to the reforms. The study, ‘Evaluation of Teachers’ Pay Reform’, draws on large-scale surveys of headteachers and teachers together with school case studies and an analysis of national data. The survey results were weighted to make them nationally representative at school level. Here are five key findings.

Key finding 1: Despite criticism of the pay reforms from some teachers, implementation of the reforms appears to have gone smoothly for most schools.

By spring 2015, almost all LA maintained primary and secondary schools (99 per cent) report they have revised their pay and appraisal policies. Our survey revealed that a majority of teachers agreed that their school’s revised pay policy: treats all staff equally without favouritism (60 per cent); is clear and easy to understand (57 per cent); and is applied consistently across all teachers (52 per cent). However, while DfE’s guidance to schools suggests that senor leaders should consult with staff on policies for determining teachers’ pay, less than a quarter of teachers (23 per cent) felt they had had a meaningful opportunity to contribute to their school’s pay policy before it was introduced.

Key finding 2: Most headteachers appear to have taken a cautious approach to the reforms, choosing to implement only the statutory changes rather than to make more far-reaching revisions.

Our findings suggest that most schools have introduced only modest changes to their pay policies. For example, the vast majority of schools (90 per cent) have not changed the number of increments on the Main Pay Range from six, nor have they changed the number of increments on the Upper Pay Range from three (94 per cent).

Similarly, rather than gain a potential competitive advantage over neighbouring schools by introducing reforms which would give them more flexibility in their pay arrangements, most headteachers (84 per cent) report that their schools’ pay policies are similar to, or the same as, other schools in their local areas.

Key finding 3: Most headteachers report that the pay reforms have not had an immediate impact on teacher recruitment and retention.

The pay reforms were designed to support headteachers to recruit and retain ‘excellent’ teachers, thereby improving teacher quality and, ultimately, outcomes for pupils. However, our findings suggest that for most schools, the reforms had not yet impacted on teacher recruitment and retention. Responding to our survey in 2015, fewer than one in ten headteachers (7 per cent) reported that the pay reforms had had a positive impact on their efforts to recruit teachers, although a third reported that the pay reforms had impacted positively on their ability to keep their existing teachers.

Key finding 4: Performance-related pay (PRP) has not resulted in a substantially higher variation in the pay of teachers.

Performance-related pay was introduced to enable schools to recognise and reward a teacher’s performance through an increase in pay. As such, one might expect to see greater variation in teachers’ and leaders’ pay following the reforms. However, our analysis reveals that while the variation of teachers’ and leaders’ pay has changed over time, with some movement away from the (now reference) spine points, these changes have been small (in the case of teachers) and are not clearly related to the timing of the reforms (for leaders). Thus, the impact to date on pay and incentives appears to be minimal. Our colleagues at the University of Bristol and the University of Texas at Austin have also blogged about this.

Key finding 5: Performance management processes have improved and most teachers feel their schools’ policies are fair, but the changes have added to teachers’ workloads.

We found evidence that schools had made a number of changes to their performance management processes. The main changes relate to objective setting, evidence use, and progression pathways. These changes are discussed in detail in our report, but one of the key messages is that performance management processes were reported by both senior leaders and teachers to be more transparent, robust and rigorous as a result. However, many teachers said that the process of gathering and reviewing evidence had added to their workload – affecting both appraisers and those being appraised.

A final word

These findings should be viewed in the context of a period of pay restraint, where many headteachers may feel they do not have enough funding to offer PRP bonuses to staff; an issue that has recently been raised by the CEO of a multi-academy trust. The budget constraints experienced by schools, combined with the limited number of changes adopted by schools, may also help to explain the lack of impact of pay reforms on teacher recruitment and retention. It remains to be seen whether the national funding formula and the additional £1.3 billion for schools will make a difference to schools’ ability (and desire) to pay high-performing teachers more.