Ideology beats the facts as Gove pushes performance-related pay

The government’s plans to scrap the national salary scheme for teachers is nothing more than a thinly-veiled cost-cutting scheme.

In last week’s autumn statement (remember that? Its thunder was rather stolen by the Duchess of Cambridge's womb), George Osborne announced plans to scrap the national salary scheme for teachers, a pay-scale that enshrines teachers rewarded for loyalty and long-service. In its place, he proposes a system that gives individual head teachers power to set pay based on performance, representing a move towards deregulation of pay in the school system.

The Chancellor and the Education Secretary Michael Gove are attempting to argue that the introduction of a performance-based pay scale will "drive up teacher quality." Gove commented after the statement that "these recommendations will make teaching a more attractive career and a more rewarding job”, going as far as to say that the new measures will "empower" schools to “recruit the best teachers.”

But one need only defer to one’s own school days to find ample evidence that the best teachers are not motivated by money. Take my A-Level English teacher as an example. He had taught for over 25 years, and was rewarded for his loyalty by gradually moving up the ranks to become head of English. His teaching stood out because he loved his subject, and he loved to educate. Such was this sexagenarian’s enthusiasm, that while teaching The Tempest to my class, he once jumped up on to a table-top to deliver a monologue. Perhaps if performance-related pay had been in effect at the time, he would have given that extra oomph to Caliban’s "noises and sweet airs" speech in order to move up that next pay bracket. But I don’t think so.

The notion that good teachers aren’t motivated by money has also been more comprehensively proved. A recent international survey by the OECD found that in countries where the teaching salary is relatively high, like the UK where the average starting salary for a teacher £23,010, performance-related pay was shown to lead to a decline in teaching standards.

Despite being educated at St Paul's, Osborne can’t claim to be so ignorant about the state school system that he actually thinks this proposal will make teaching better. His motivations are summed up neatly by NUT leader Christine Blower:

Teachers are already suffering from pay freezes, job losses and increases in pension contributions – they now face pay cuts due to a policy based on ideology not evidence.

The NASUWT and ATL teachers’ unions are also critical of the proposals, and the NUT has voted to take "all appropriate action" to challenge threats to their national pay schemes.

Teachers are trying, and will continue to try, to educate the government on the folly of these measures.  Unfortunately, given their track record, Cameron, Osborne, Gove and the rest of their gang are likely to sit sullenly at the back of the class talking amongst themselves, and refusing to listen to the teacher.

This article was updated on 13 December 2012. It previously stated that George Osborne was educated at Eton, not St Paul's - this error has now been corrected.

Chancellor George Osborne Hosts Annual Christmas Party For Charity. Photograph: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR