Industrial Action at Colfe's - 4 March 2020
The following letter was sent to parents from Richard Russell, Headmaster on 4 March 2020:
I wanted to write to you in more detail about the industrial dispute which has arisen at Colfe’s recently. Many of you will have seen the article in the Sunday Times over the weekend. Although such publicity is never welcome, the coverage was balanced and reasonable. I hope that the following may be of interest and enable you to understand the respective dilemmas of the teachers and the governors. I hasten to add, however, that I do not expect it to mitigate in any sense the inevitable disruption that strike action will generate for you as parents.
As you know from my previous communication on this matter, the dispute has arisen because the governors initiated a consultation last September into whether or not the school should remain in the Teachers’ Pension Scheme (TPS). This was extremely unsettling for staff who stand to lose the prospect of guaranteed income in retirement. The proposed alternative to the TPS was a defined contribution scheme into which the school would contribute 16% of salary.
In accordance with the consultation process, Colfe’s teachers elected representatives who worked very hard through the Autumn Term to find ways in which remaining in the TPS could be justified and met five times with governors. Just before half term, however, the governors reached a provisional decision to remain within the TPS for another two years, but to switch to a defined contribution scheme in September 2022. An employer contribution rate of 18.5% was proposed, supplemented by life assurance and critical illness insurance, taking the total value of the package to 20%.
During this period staff have been scrupulously professional, as ever, and prioritised the care for your children.
The proposed solution would enable staff to remain in the TPS for another two years and switch to a defined contribution scheme two years hence which is, if viewed objectively, offered on advantageous terms. Parents will of course be able to make the comparison with their own pension arrangements.
In the long term, or indeed in the medium term, I don’t think it is controversial to predict that the TPS will become unaffordable for the majority of independent schools. More than 100 independents have already left the scheme and many more are going through a period of consultation, as Colfe’s continues to do. The main difficulty is that the employer contribution is funded by the taxpayer in state sector schools whereas in independent schools it comes straight out of the fees that you pay.
The annual fee at Colfe’s this year (senior school) is £17,604. Following the decision of the Government Actuary to increase the contribution level from 16.4% to 23.6% last September, just under 9% (about £1500) of that fee goes into employer contributions to the TPS. That means, across the school as a whole, that we are writing a cheque to the TPS for £1.45 million on net fee income of £16.7 million before we have paid salaries or paid for the heating of the classrooms. Governors have concluded that that is unsustainable.
And it’s not even as if the contributions are funding the teachers on whose behalf they are paid. The money goes straight back out to fund the retirement of teachers who have already retired and who are living longer than they used to. Nationwide the annual shortfall between income and expenditure on the TPS was about £3.5 billion last year alone, so future increases above 23.6% seem inevitable if deeper deficit is to be avoided.
I appreciate that this is a very difficult situation for pupils and parents. We are doing everything we can to mitigate the impact but I must ask you, on behalf of the governors, to bear with us. I would also ask you to remember that the teachers who are going on strike tomorrow are acting out of principle in defence of a benefit which they have come to regard as a sacrosanct part of their remuneration. Many of them have become my personal friends in the course of the last 15 years and I can assure you that they have not taken this decision lightly.
Once again, and on behalf of the governors, I am extremely sorry for the disruption that this must be causing to you all. I will continue to do all that I can to effect a resolution in the days ahead.
With best wishes