Teachers' pay increases may be 2%

This year's funding guarantee is less than in previous years

Teachers in England and Wales are being warned their pay rises may be pegged to 2% for each of the next three years.

A funding settlement for England's schools announced this week by the government guarantees 2.1% a year increases in core funding.

A statement to Parliament said its attitude to pay - covering Wales as well - would be "consistent with" this.

Ministers are assuming schools will make "efficiency gains" of 1% a year. Teachers' unions are unhappy.

Schools Minister Jim Knight said in a written Commons statement the government expected "substantial improvement in efficiency" in schools and the public sector as a whole.

"It is based on a cautious but realistic assessment of the wide range of pay and non-pay pressures that schools will face across the next three years."

We are disappointed at the low level of the minimum funding guarantee, which is below cost pressures and will put some schools in a very tight financial situation John Dunford, head, Association of School and College Leaders

The resulting "minimum funding guarantee" (MFG) was "affordable within the comprehensive spending review settlement, while allowing us to allocate significant additional funding increases to our key priorities".

For local authorities experiencing rapid growth in pupil numbers, or a significant influx of children with English as an additional language, there would be an exceptional circumstances grant, paid out every autumn.

There are other special sources of funding for various initiatives - but thousands of schools will get only the guaranteed minimum.

'Implications clear'

Mr Knight said the Department for Children, Schools and Families was working with external partners, including representatives of head teachers and school governors, to develop support mechanisms for schools to help them make the best use of their resources.

He said ministers had received the detailed recommendations of the School Teachers' Review Body on teachers' pay from September 2008.

A response would come "when we have carefully considered their detailed recommendations within the wider context of the government's approach to public sector pay".

But he added: "We will ensure that the government response is consistent with the MFG we are announcing today."

The general secretary of the NASUWT teachers' union, Chris Keates, said: "The implications of the 2.1% minimum funding guarantee, a reduction on previous years, are clear." Her union would oppose vigorously any attempt by schools and local authorities to make the efficiency savings at the expense of teachers' pay, working conditions and jobs.

"The funding settlement may be tighter but it certainly does not warrant such measures by schools and we welcome the fact that the government is also warning against such an approach.

"Measures are needed to minimise turbulence in schools."

The head of the Association of School and College Leaders, John Dunford, said the government had warned that money would be tight this year.

"However we are disappointed at the low level of the minimum funding guarantee, which is below cost pressures and will put some schools in a very tight financial situation."