December 2010

The know zone

  • Hopes and fears
    Be wary of creating ‘legitimate expectations’ in parents and others, warns Richard Bird, as failure to meet them could lead to unintended consequences. More
  • Time to clock off?
    The interim Hutton Report published in October outlined the likely changes in store for public sector pensions. As we await the final report, ASCL is continuing to make the case to ministers that deep cuts to pensions could lead to an exodus of schools leaders. More
  • Getting into hot water
    How is a school defined as ‘poor’ in financial terms? Sam Ellis looks for some facts and figures beyond the budget sheets. More
  • Lead vocals
    Quotes from Norman Vincent Peale, Alan Alda, and Guillaume Apollinaire More
  • An enduring spirit
    A decade ago, ASCL member Sean Crosby – a recently appointed deputy head and active sportsman – had an accident on his mountain bike which was followed by two devastating strokes. With the help of his wife Maria, he talks about coping with his disability and preparing for a 250-mile charity bike ride in India. More
  • SPACE TO LEARN
    With more than a quarter of engineers citing outer space as a reason behind their career choice, a new space programme aims to entice more youngsters into science and technology. More
  • Adding value
    As we all face up to the harsh reality of reduced spending and investment, it is inevitable that stress levels in the workplace rise. At times like these, the role of the employer in supporting wellbeing becomes even more important. More
  • The perfect blend?
    Is the traditional model of school governance out-of-date? Should schools have more say over who sits on the board and for how long? Is it still necessary for parents and the LA to be represented? And should governors be selected for their expertise, rather than elected to the post? School leaders share their views… More
  • Leaders' surgery
    The antidote to common leadership conundrums More
  • Increased pressure
    It could have been worse... but the spending review will still have far-reaching consequences for the funding of schools and colleges once the dust settles, says Brian Lightman. More
  • A head for heights?
    When looking to appoint a new headteacher, governors should throw the recruitment agency advice in the bin. Instead, says David Nicholson, think big and bold. Think Titan. More
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The interim Hutton Report published in October outlined the likely changes in store for public sector pensions. As we await the final report, ASCL is continuing to make the case to ministers that deep cuts to pensions could lead to an exodus of schools leaders.

Time to clock off?

The interim report of Lord Hutton’s enquiry into public sector pension reform was published in October. Overall, the recommendations were not as ominous as we might have expected but, as an interim report, its proposals have not been finalised and there may be changes in the final report which is due in the spring.

ASCL welcomed the acknowledgement in the report that public sector pensions are not “gold plated”, that they are an important part of individuals’ remuneration and have an impact upon recruitment and retention. In the October spending review, Chancellor George Osborne indicated that this was also his view.

While the government has made it clear that some change is inevitable, ASCL has been vocally and repeatedly making the point that pensions are not as generous as often painted and in the vast majority of cases are not unreasonable considering contributions paid in and years of service.

In addition, changes have already been made to the Teachers Pension and Local Government Schemes to contain costs and time is needed to understand the effect these will have.

We have also warned the government that deep cuts to pensions would be met by robust disapproval and could well lead to a mass exodus of teachers and leaders from the profession.

ASCL has been asked to submit additional evidence on specific points for the final report and this will be on our website in December. We will continue to lobby vociferously, along with the other teacher and support staff unions, to protect members’ pensions.

The interim report covers all public sector pension schemes generically. However, it specifically acknowledges that both the Teachers Scheme and the Local Government Scheme have been reformed relatively recently and differences between the various public sector schemes may have to be taken into account in the final recommendations. ASCL will be actively engaged in the debate on behalf of members in both schemes.

It also recognised that any increase in contributions during a wage freeze is effectively a pay cut, and some form of phasing in and protection for the lower paid will be considered.

The report stressed that accrued benefits should be protected, not just for those already receiving pensions but for those currently accruing pension. Pension earned to date would be paid under current provisions but future accruals will not have this protection and may be subject to proposed changes.

It is possible, for instance, that some members in the Teachers Pension will have one pension payable at 60, with a tax free lump sum based on contributions up to a set date, and then a second pension based on future, higher, contributions payable at, say, 65, with, perhaps, no automatic lump sum. As always, the devil is in the detail and we await a clear definition of what comprises accrued benefits.

The Local Government Scheme already reflects many of these proposals.

Write to MPs

Of immediate concern is the plan announced in the spending review to base pension calculations on the Consumer Price Index, rather than the Retail Price Index, from April 2011. For a pensioner on a £10,000 pension, this could lead to a loss of £30,000 over 25 years. ASCL is urging members to write to their MPs to make them aware of the implications. More information and an outline of key points are available at www.ascl.org.uk

The main points of the interim Hutton Report are as follows:

  • The status quo is untenable and change is inevitable.
  • There should be both short-term change to address funding
  • Short term measures could include higher employee contributions, the change from the Retail Price Index to the Consumer Price Index as a measure of inflation, and a higher retirement age.
  •  It is possible that final salary will be replaced by some form of career average for the calculation of pensions. There is no proposal for this to happen immediately.
  • Accrued benefits should be protected, although these have not been defined.

Carriage clock

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