Labour’s broken promises put 13,000 teachers at risk

Today [Wednesday 21st May 2025], the Conservative Party are warning that Labour's broken promise to compensate schools for their Jobs Tax and reckless unfunded pay rises could put up to 13,000 teacher jobs at risk across the country. 

When Rachel Reeves introduced Labour's manifesto pledge breaking Jobs Tax in the Autumn Statement, Ministers – including the Education Secretary - repeatedly promised that public services would be compensated for the increased costs, and therefore not be impacted. This was yet another broken promise by this Labour government. Despite promising to compensate schools for the impact of their decisions, schools have been slammed with a financial shortfall of up to 30%, leaving many schools with no choice but to axe staff.

A recent survey from the Association of School and College Leaders, taken after Rachel Reeves' budget, revealed that the majority of schools will not have their new National Insurance (NICs) costs covered by compensation, with a staggering 86% of respondents saying they will be forced to make cuts to staffing next year as a result.

Meanwhile School Teacher's Review Body has reportedly recommended the government award teachers a pay rise of 4.3%. The Prime Minister's spokesman said on the 28th April that “There'll be no additional funding for pay”. Without funding to compensate for this pay rise, schools will be left with a shortfall of £800 million according to the Institute for Fiscal Studies.

The £800m shortfall is equivalent to 13,351 full time teachers on the average teacher's annual wage. This figure is an underestimation, as sadly many teachers are already being made redundant due to the pressures being felt in school budgets left by the government's broken promise to compensate schools for NICs.

This analysis puts into question Labour's manifesto commitment to recruit 6,500 new teachers, with more than double the number of teachers they vowed to hire potentially being out of a job.

Senior figures in the education sector are already warning of this, with John Coles, Chief Executive of United Learning, saying that the pay rises would leave to ‘tens of thousands of redundancies' whilst Pepe Di'lasio, General Secretary of the Association of School and College Leaders, warned that the pay rises could lead to significant cuts in schools' budgets.

This is why the Conservatives are calling on Labour to do the right thing at the spending review, and take the action needed to ensure that thousands of teachers are not lost as a direct consequence of their broken promises. The Conservatives are also pushing for the Labour government to give the education sector the transparency they deserve, and will table a new amendment to the government's Schools Bill that would force Labour to publish the details of the shortfalls schools are receiving for their NICs hikes.

Laura Trott MP, Shadow Education Secretary, said:

“Thousands of teachers' jobs are already on the line due to Labour's broken promise to compensate schools for their jobs tax, now the Government are making things worse by refusing to fund teacher's pay rises.

“The Prime Minister and his ministers have repeatedly failed to rule out whether their decisions are putting teachers' jobs at risk. Sadly, we now know why. 

“Labour must put this right at the upcoming spending review or, up and down the country, schools will be forced to make more painful redundancies as a direct result of their failure to keep their word.”

ENDS 

Notes to Editors

Over 13,300 teachers' jobs will be at risk if the Government abandons schools by failing to provide the compensation they need to fund the recommended pay rise:

• The Schools Teachers' Review Body has recommended the Government to award teachers a pay rise of close to four per cent. The Timesreported that the independent pay review body, representing more 514,000 teachers, has recommended a pay rise of close to four per cent  (The Times, 28 April 2024, link).

• Without government funding to compensate this pay rise, schools will be left to face a shortfall of £800 million this year. The Institute for Fiscal Studies reported, ‘If these pay offers are accepted, we estimate that mainstream school costs would go up by nearly six per cent in 2025-26. For comparison, mainstream school funding is due to go up by 4.3 per cent this year, or about £800 million less than costs' (Schools Week, 28 April 2025, link).

• The unfunded cost to the education sector, in addition to the hike in National Insurance and  pension contributions, is the equivalent of employing over 13,300 teachers. Without government funding to compensate the pay rises, the £800 million cost to schools is the equivalent of 13,351 teachers in England this year (Conservative Research Department Analysis, 15 May 2025, archived).

Labour have already failed to deliver the financial certainty they promised to schools and continue to leave them in the dark:

• The Department for Education promised to ‘announce the upcoming pay awards as close to the start of the financial year of 1 April as possible' – but the Department has not done this, failing to provide schools with the certainty they need to deliver the best education for children across the country. In September 2024, Deputy Director of the DfE's funding policy unit, Tom Goldman, said the School Teachers' Review Body (STRB) process was ;being brought forward with an expectation that the 2025 award will be announced earlier as soon as possible after April 2025' (TES, 21 November 2024, link).

Several headteachers and unions are warning this Labour Government of the disastrous impact an unfunded pay rise would have on schools across the country:

• The Chief Executive of the country's largest academy trust has warned that the ‘one thing government can't do is accept' of nearly four per cent without funding because it would lead to ‘tens of thousands of redundancies'. Jon Coles, the Chief Executive of United Learning, said, ‘if the four per cent was true “the one thing government can't do is accept that without funding…Sector wide, that would extrapolate to ruinous harm in the one well-functioning public service: tens of thousands of redundancies' (Jon Coles, Twitter, 28 April 2025, link). 

• The Chief Executive of the country's largest academy trust said that his academies would face £10.5 million in unfunded costs because of Labour's decisions. Jon Coles, the Chief Executive of United Learning, said ‘if it's true the STRB recommendation is four percent, then the one thing the government can't do is accept that without funding. For us: our funding for next year is up by 0.7 per cent per pupil, funding for the NI increase is £1.5 million less than its cost, and each one per cent pay increases costs ~£3 million…so we would have £10.5 million of unfunded costs' (Jon Coles, Twitter, 28 April 2025, link). 

• The General Secretary of the Association of School and College Leaders said it was ‘vital' that the government funds the anticipated pay increase, which would otherwise see ‘significant cuts' to school budgets. Pepe Di'lasio, General Secretary of ASCL, said ‘it was vital that schools are provided with the funding they will need to pay such an award. If the government fails to do this then we will see many schools having to make very significant cuts to their budgets – and consequently educational provision. WE cannot emphasise enough how important it is that the government does not rely on the fantasy that this can be addressed through “efficiencies”' (Schools Week, 28 April 2025, link).

• The General Secretary of the National Association of Head Teachers said any pay rise ‘needs to be fully funded' because ‘most schools simply do not have the headroom within their existing budgets'. Referring to the real-terms drop in teacher pay over recent years, Paul Whiteman, the General Secretary of NAHT, said school staff ‘absolutely deserve a pay award that moves them closer to full pay restoration, but that needs to be fully funded - most schools simply do not have the headroom within their existing budgets' (TES, 21 November 2024, link). 

• The Assistant General Secretary of the National Association of Head Teachers said he is hearing from leaders who are having to cut teachers because of budget deficits. James Bowen, Assistant General Secretary of the National Association of Head Teacher said, ‘even now, we are hearing from leaders who are having to manage redundancies, often because of budget deficits. This can include cuts to leadership roles, teachers, and support staff' (The Guardian, 9 February 2025, link).

• The Chief Executive said a near four per cent pay rise for teachers without government funding will be ‘catastrophic for a lot of schools in terms of the quality of education they can provide'. Harris CEO Sir Dan Moynihan said, ‘There desperately needs to be higher teacher pay because, obviously, that's been a key feature in the problems with teacher shortages…But should they raise the rise to nearly 4 per cent and not fund it? I imagine that will be catastrophic for a lot of schools in terms of the quality of education they can provide' (TES, 15 May 2025, link).

This £800 million shortfall is on top of the shortfall schools are already facing because of Labour's disastrous Jobs Tax that they failed to compensate for, despite their promise to:

• Schools will be forced to lay off teachers and support staff this autumn as a result of Labour's Jobs Tax. The Telegraph reported that, ‘education leaders said…that funding designed to offset the Chancellor's £25 billion National Insurance rise will not fully cover their costs' (The Telegraph, 25 March 2025, archived).

• School Business Services found that 86 per cent of schools would be forced to reduce staff to secure financial sustainability over the next couple of years. Following this was a reduction in spending on buildings at 77 per cent and reducing curriculum budgets at 69 per cent (School Business Services, Budget Assumptions 2025: What are you planning?, accessed 19 May 2025, archived).

• The Education Partnership Trust said balancing the budget for 2025-26 is ‘the toughest one yet in ten years of education'. Jonathan Georgy, Chief Operating Officer at the Education Partnership Trust, posted that ‘the challenge balancing the budget for 2025-26 is the toughest one yet in ten years of education' (Schools Week, 20 March 2025, link).

• The Association of School and College Leaders said that schools are up to 20 to 30 per cent short of the money they needed to pay NICs, equating to a loss of over 6,900 teachers. ASCL said this shortfall could equate to losing at least two teachers at an average-sized secondary school, which would equate to a loss of 6,904 teachers for all of England's 3,453 state-funded secondary schools – hundreds more than the 6,500 extra teachers Labour promised (I News, 26 March 2025, link).

• Headteachers have warned that the Chancellor's Jobs Tax could wipe out any gain schools receive from Labour's plan to recruit 6,500 new teachers – one of Labour's flagship educations. The I reported, ‘Headteachers' warnings about Rachel Reeves's national insurance rises suggest they could more than wipe out again gain schools receive from Labour's plan to recruit 6,500 new teachers' – which was one of Labour's flagship education pledges from their General Election 2024 manifesto (I News, 26 March 2025, link; The Labour Party, Change, 13 June 2024, link).

• After Labour provided £1 billion in ‘compensation' to cover schools' increased National Insurance Contributions, the River Learning Trust said that ‘this piecemeal approach to funding is too reactive and does not help with long-term planning [or] budget stability'. Benedicte Yue, the Chief Financial Officer at River Learning Trust, said that ‘this piecemeal approach to funding is too reactive and does not help with long-term planning [or] budget stability' (Schools Week, 20 March 2025, link).

• The Chief Executive of the country's largest academy trust said that ‘the grant to “compensate us” for the increased employer national insurance contributions is 20 per cent short of meeting our costs”. Jon Coles, the CEO of United Learning, said ‘the grant to ‘compensate' us for the increased employer national insurance contributions is 20 per cent short of meeting our costs. This seems to be in line with a large number of other employers. Doesn't feel like a serious attempt to meet the ‘cost neutral' promise' (Schools Week, 20 March 2025, link).

• The Chief Financial Officer at ONE Academy Trust said Labour's decision to only begin compensating schools for the increased National Insurance Contributions in September means they'll be left without support for months, which is ‘absolutely devastating for the sector'. Jake Richardson, the Chief Financial Officer at ONE Academy Trust, said trusts would have to start paying the increased contributions next month, but would not receive funding until September, commenting ‘this on top of the shortfall in funding is absolutely devastating for the sector' (Schools Week, 20 March 2025, link).

• The head of finance at Swale Academies Trust said ‘our backs are against the wall', people will ‘lose their jobs' and ‘student outcomes will suffer'. Gavin Bailey, the head of finance at Swale Academies Trust, said ‘our backs are against the wall. Reserves can only be spent once and, based on the national benchmarking reports, most of us have already eaten into those in the past couple of years'. He added, people would ‘lose their jobs, and those that are left will feel more overworked and undervalued. Student outcomes will suffer' (Schools Week, 20 March 2025, link).

Annex

[Note: To get to this figure, we have divided the Institute for Fiscal Studies' figure of £800 million, which is the shortfall schools are expected to face, by the median salary of a teacher combined with the average hike in employer National Insurance contributions and pension contributions - the median cost of employing a teacher for that region. This has then given a conservative figure of the number of teachers jobs at risk of redundancy regionally and nationally.]