Schools in England are to get around £500 million in extra funding for the pay raise for teachers this school year. The offer was made on Wednesday, after schools had been expected to cover part of the 3.5% increase from existing budgets.
Daniel Kebede called the extra money a "significant" step in negotiations and said schools were "running on empty". The National Education Union said it expected the extra funding to be around £500 million.
Wednesday funding offer
The government told the union the money would come from savings in employers' contributions to the local government pension scheme. Its letter said a 4.9 percentage point drop in what employers are expected to contribute would deliver significant savings on the pay bill for support staff.
In July, ministers accepted the recommendation of the independent pay review body for teachers and agreed a 3.5% increase from September 2026, followed by 3% the following year. That earlier package included an additional £700 million for 2026-27 and £1.1 billion for the following year.
IFS shortfall estimate
Independent economists at the Institute for Fiscal Studies said that settlement left Schools in England facing a shortfall of around 1% between rising costs and funding this year. Luke Sibieta said the extra money would mean the pay increase this year was fully funded, and he said the uplift could potentially bring this year into line with next year.
Bridget Phillipson accepts Teacher Pay Raise And Pay Scale deal for England set out the earlier pay decision, while Bridget Phillipson accepts Teacher Pay Raise 2026 worth 6.6% outlined the longer-running pay settlement.
Union response in April
In April, 90% of teachers who voted in an indicative ballot said they would be prepared to take industrial action over funding and pay, on a turnout of 48%. Paul Whiteman said the latest decision was "certainly welcome" and put schools in a "better position", but his union would look carefully at the detail "to determine whether this means the pay uplift is genuinely fully funded".
Pepe Di'Iasio said he was "pleased" with the announcement of additional funding, though he added that "the wider pressure on school and college budgets remains intense". Matt Wrack said schools needed "a sustainable, long-term injection of extra funding".
The National Education Union now has the funding detail it pressed for, and the next step is whether it decides the offer removes the budget pressure that drove the April ballot. If it does, the case for a strike ballot weakens; if it does not, the dispute over who pays for the 3.5% rise stays open.
