On the go: Fifty-seven independent schools could close because of the £1.1bn rise in the employers’ contribution to the Teachers’ Pension Scheme from September 1 2019, with a further 185 withdrawing from the scheme.
This education crisis was triggered last September by the announcement that employer pension contributions would rise to 23.6 per cent of pensionable salary from 16.48 per cent – a 43 per cent rise with only 12 months’ notice.
The government is providing temporary comfort for state schools and colleges in England with the promise of £910m to cover the increase in their employer contributions in 2019-20.
However, in its response to its consultation published on April 10, the government confirmed none of the 1,477 independent schools or 65 higher-education establishments in the TPS would receive support, and future funding is uncertain.
In the responses to the consultation, many independent schools cited the likelihood of schools leaving the scheme, or teachers leaving their schools: 185 schools indicated leaving the TPS; 65 respondents cited the potential impact on the state sector of schools closing and job mobility between sectors. Alarmingly, 57 independent schools stated their institution could close because of the increased costs.
The Department for Education responded by saying it will begin work to consider allowing independent schools to leave the scheme via phased withdrawal. This potential phased-withdrawal approach would enable a school to retain its current teacher members in the scheme but would close the scheme to new entrants.
For universities too, the pensions hike is a big burden: Alistair Jarvis, chief executive of Universities UK, said: "We are disappointed that government has decided not to provide any additional funding to universities in England to offset the costs of unplanned increases in employer contributions to the Teachers' Pension Scheme.
"This is effectively a stealth tax to boost the Treasury's coffers. It represents annual cost increases of an estimated £142m for around 70 post-92 universities across the UK from this September."
Helen Fairfoul, chief executive of the Universities and Colleges Employers Association, added: "Our member universities have been clear in their engagement with this consultation that an increase of over 7 percentage points (which equates to a 40 per cent increase) in their contributions to the Teachers' Pension Scheme, and with very little notice, will have a highly detrimental impact, including on their provision for students."
