Sizing up Labour’s ambition to address the teacher shortage in England

by Dr Sam Sims

The Labour party have promised to “recruit over 6,500 new teachers” in England.[1] The 6,500 number was apparently chosen to reflect the best available estimate of the shortage in England at the point when the policy was first announced in 2023. This blog post looks at whether Labour are likely to achieve the target based on their recent manifesto commitments.

In Labour’s 2023 education ‘mission’ document, they promised two policies aimed at retaining more teachers.[2] First, introduce a new £2,400 early-career framework (ECF) retention payment paid to all teachers after they complete their first two years on the job.[3] Second, reform retention incentives targeted at specific subjects and phases. In their manifesto, Labour announced that they have set aside £450m per year to spend on hitting their teacher target. This is to be paid for from the application of VAT and business rates to private schools.

There are a couple of different ways that we might interpret the 6,500 target. A less ambitious version would be to recruit or retain 6,500 additional people. This version is defined in terms of the ‘flow’ of people into and out of teaching. Of course, recruiting or retaining an extra person in a given year doesn’t mean they will stick around indefinitely. A more ambitious version of this target is therefore to increase the total number (or ‘stock’) of teachers in the workforce by 6,500 (1.4%[4]) by the end of the parliament. Let’s evaluate the likelihood of achieving each of these versions of the target.

Achieving the less ambitious target

Approximately 25,000 teachers per year will finish their early career training during this parliament.[5] This means the ECF retention bonus policy would cost around £60m per year. The £2,400 payment amounts to about 7% of a third-year teachers’ salary.[6] Research suggests that this would decrease the number of teachers leaving in the year the ECF incentive is paid by about 14-21%.[7] Since approximately 2,000 per annum leave the workforce after their second year on the job, this amounts to about 300-400 additional teachers staying on after their ECF each year.[8]

However, the research on which this is based focuses on maths and science teachers. These are the subjects in which shortages are largest, in part because those with STEM qualifications can often get paid more outside of teaching.[9] Labour’s ECF bonus will be paid to everyone, regardless of whether they are in a shortage subject or their likely earnings outside of teaching. The actual number of additional teachers retained each year is therefore likely to be a bit lower than 300-400.

Spending £60m a year on the ECF bonus leaves £390m per year for retention incentives targeted on shortage subjects or geographic areas. Existing research has modelled the costs of a £2,000 retention payment paid after each of the first two years of teachers’ careers (£4,000 in total).[10] Such a policy prevents a teacher leaving (in the short run) at a cost of around £63,000 per teacher.[11] Spending the entire remaining £390m on such a policy would therefore buy about 6,190 additional teachers per year, in the short run.

Taken together, spending £60m a year on an ECF bonus and £390m on targeted bonuses would, therefore, retain approximately 6,500 additional teachers per year. Sustained across the parliament, this would mean that Labour would easily exceed the ‘less ambitious’ version of their target. This raises the prospect of meeting the more ambitious, and more important, version of the target: having 6,500 more teachers by the end of the parliament.

Achieving the more ambitious target

Since Labour seem to have set aside plenty of money, let’s think about a radical policy to pay certain teachers an additional £2,000 retention bonus for each of their first five years in the profession. This supercharges the policy because the additional teachers in the system compound over the five-year period.

To fix ideas, let’s apply this to a cohort of maths teachers. By extending the modelling exercise in Table 6 of Sims & Benhenda (2022), it’s possible to estimate that this would lead to 423 extra maths teachers working in England by the end of the next parliament. Applying this policy to all new cohorts of maths teachers across the next parliament would come at a total cost of £28m.

This £28m price tag is a fraction of the £2bn that Labour has set aside for spending on targeted recruitment incentives for new teachers over the course of the next parliament. Evidence suggests that increasing the value of the retention payments has a broadly linear relationship with retention, at least up to £7,500.[12] Doubling the retention payments should therefore at least double the number of additional maths teachers by the end of the parliament.[13] Doing that across seven shortage subjects, which is affordable within Labour’s budget, would therefore likely be enough to hit the more ambitious version of the target.

An ambitious reform

The back-of-the-envelope estimates presented here contain many assumptions about how retention incentives will be implemented and play out. There is of course also considerable uncertainty about what will happen in the wider economy, and therefore to graduate job choices, over the next five years. However, what should be clear from the above is that Labour is committing a very serious sum of money to addressing the teacher shortage. To further put this in perspective, consider that the Department for Education budgeted a total of £450m for all spending on the ‘Teaching Workforce’ (including spending on teacher retention payments) in 2023/24.[14] Labour are planning to spend that much again, purely on addressing teacher shortages. If sustained, this investment is likely to go a long way toward solving teacher shortages by the end of the parliament.

Notes

[1] “Labour will use money raised from ending private school tax breaks to: Recruit over 6500 new teachers to fill vacancies and skills gaps across the profession” Page 10 here: https://labour.org.uk/wp-content/uploads/2023/07/Mission-breaking-down-barriers.pdf

[2][2] “Labour will restructure teacher retention payments into one payment scale incorporating different factors such as subject and geography, based on evidence showing incentive payments are an effective means of retaining teachers with knowledge and expertise. On top of this, Labour will introduce a new Early Career Framework retention payment upon completion of the updated Framework recognising the professional development staff have undertaken.” Page 11 here: https://labour.org.uk/wp-content/uploads/2023/07/Mission-breaking-down-barriers.pdf

[3] https://schoolsweek.co.uk/labours-school-policy-blitz-what-we-know-so-far-and-what-we-dont/

[4] https://www.tes.com/magazine/analysis/general/how-many-teachers-are-there-uk-england-scotland-wales-northern-ireland#:~:text=In%20England%20data%20from%20the,216%2C000%20in%20secondary%20schools.

[5] https://explore-education-statistics.service.gov.uk/find-statistics/teacher-and-leader-development-ecf-and-npqs

[6] https://www.nasuwt.org.uk/advice/pay-pensions/pay-scales/pay-scales-england.html

[7] https://www.gatsby.org.uk/uploads/education/datalab-simulating-the-effect-of-early-career-salary-supplements-on-teacher-supply-in-england.pdf

[8] About 2000 teachers per year leave after their NQT+1 year i.e. after ECF https://department-for-education.shinyapps.io/turnover-and-retention-grids/

[9] http://www.gatsby.org.uk/uploads/education/increasingscienceteachers-web.pdf

[10] Sims, S., & Benhenda, A. (2022). The effect of financial incentives on the retention of shortage-subject teachers: evidence from England. CEPEO working paper. Table 6. https://www.gatsby.org.uk/uploads/education/reports/pdf/the-effect-of-financial-incentives-on-the-retention-of-shortage-subject-teachers-evidence-from-england.pdf

[11] It costs more than £4000 per teacher because most of the teachers that receive the bonus would not have left anyway.

[12] https://assets.publishing.service.gov.uk/media/656761b65936bb000d3166ea/Evaluation_of_the_phased_maths_bursaries_pilot_-_final_report_November-2023.pdf

[13] Depending on how the compounding plays out, it should more than double it.

[14] https://committees.parliament.uk/publications/40066/documents/195550/default/