The Association of Colleges has warned that it will be “very hard” to recommend colleges give their staff a pay rise of anything more than 2 per cent this year.
In a Budget submission to the Treasury, the membership body outlined how the government’s decision to snub colleges from public sector pay awards means it is highly unlikely there can be an above inflation salary bump in 2024/25.
The AoC said colleges would require a £250 million injection to afford a 5.5 per cent pay rise.
Over the summer the new Labour government announced it would hand schools a £1.2 billion pot to help fund a 5.5 per cent pay rise for teachers, as recommended by the School Teachers’ Review Body (STRB), but refused to stump up anything for colleges.
The AoC makes a pay recommendation each year which colleges use as a benchmark in their negotiations with unions that represent their staff. The membership body has delayed making a pay recommendation for 2024/25 since May.
The AoC team will meet with the five trade unions representing FE workers early in October to negotiate the offer.
But college staff may remain in limbo as the AoC said it could wait for the outcome of the October 30 autumn Budget. It is hoping for the removal of the “iniquitous” VAT charge on colleges, savings of which could be directed towards a staff pay rise.
In his letter to the Treasury chief secretary, AoC chief executive David Hughes urged: “We recognise how tight this Budget will be and understand that there are unlikely to be large spending increases announced.
“That is why I would urge you as a top priority to use the imminent extension of VAT to private schools to put right the iniquitous anomaly of colleges having no VAT relief despite their strong social inclusion and service roles.”
The Department for Education previously blamed the “very challenging fiscal context” and the fact that FE does not have its own pay review body for chancellor Rachel Reeve’s decision to find cash for school pay rises but not for colleges.
Hughes urged the Treasury to fix this exclusion.
He said: “The funding decisions communicated to colleges will make it very hard for AoC to recommend anything more than 2 per cent. It would cost government around £250 million to bridge the gap to 5.5 per cent.
“This is hampering colleges from delivering government priorities and employer needs.”
Last year the AoC made a 6.5 per cent pay rise recommendation for college staff, but this was only after the previous government found extra funding for the sector.
Additional funding was handed to colleges based on their 16 to 19 student numbers. The total pot was £470 million and was to be distributed over the next two academic years: £185 million in 2023/24 and £285 million in 2024/25.
In March, FE’s five trade unions submitted a pay claim for the 2024/25 academic year, calling for a 10 per cent pay uplift, or a £3,000 salary increase, to keep in line with the rate of inflation.
UCU general secretary Jo Grady said the AoC needs to recommend a “realistic” pay rise above 5.5 per cent or allow the well-publicised £9,000 pay gap between schoolteachers and FE staff to widen.
She told FE Week: “If college teachers are again left wanting, there is a genuine risk Labour’s flagship Skills England strategy could unravel. You cannot reskill the nation on the back of a severely underpaid workforce.
“The AoC needs to recommend a realistic pay rise that will stem the flood of college teachers deserting further education for greener pastures.
“Meanwhile, we need strategic investment from Labour alongside a workforce strategy and new national bargaining arrangements in FE.”
Reeves will deliver the 2024 autumn Budget on October 30, accompanied by a fiscal statement from the Office of Budget Responsibility (OBR). The government has already warned that it will have to make “difficult decisions” on fiscal spending after identifying a £22 billion black hole in public finances.
Last month, Reeves reportedly told government departments to find savings, including £1 billion from the Department for Education.
Sue Gray is getting some stick in the press for her salary of £170k being greater than the Prime Minister.
Surely there must be a mistake in the AOC accounts when it says the highest paid Director received a salary of £196,100 and £35,831 in pension costs for the year ending 31 March 2024 & that the CEO pay multiple to the staff median salary was 5.0 (up from 4.7 the previous year).