Using targeted pay uplifts to reduce teacher shortages

By Dr Sam Sims

CEPEO recently launched New Opportunities, our evidence-based manifesto for equalising opportunities. In this blog series, we are highlighting one of our policy proposals each week. This post will take a fresh look at the reasons why we have a shortage of teachers in England and outline the evidence for using targeted bonus payments to mitigate the problem.

Each year, around 800,000 students graduate from universities in England. And each year the government tries to lure around 30,000 graduates into teaching. Putting aside the pandemic years, the government has failed to do this every year since 2015.

An important for this is the declining attractiveness of teaching as a profession. Over the very long run, as private sector real wages have increased, the competitiveness of teachers’ pay has declined. This process has accelerated over the last decade, as austerity has seen teacher real pay fall by 5% or more, while wages elsewhere have retained their value. More recently, many professional occupations have seen a big increase in working from home, something which is largely incompatible with teaching. Teaching is not what it used to be.

An effective solution would be to dramatically increase teacher pay. Indeed, in 2019 the government announced that it would increase starting salaries by 24% over just three years. However, a series of delays to the policy, combined with sustained double-digit inflation, has rendered this once radical policy somewhat modest.

The sheer cost of a blanket increase appears to have put off the government. Keir Starmer has also refused to rule out below-inflation pay rises for public sector workers. Is there a more cost-effective, more politically palatable way to address the shortages?

There are two broad ways to cut the costs of a blanket increase. The first is to focus pay increases on the phases (secondary) and subjects (maths, physics) where shortages are most severe. The second is to focus pay increases at the career-stage (early career) in which it makes the largest difference.

In 2018, the government announced a pilot of one such policy, known as Retention Payments. These provided a £2,000 (8%) bonus to maths and physics teachers in the first five years of their careers. The policy was only available for teachers working in 42 (of the 343) local authorities in England, providing a convenient comparison group against which to gauge the impact of the policy. Asma Benhenda and I did just this, and found that eligible teachers were 23% less likely to leave the profession in a given year.

The longer-term effects of the policy are less clear. But the hope is that, by retaining more teachers during the early-career period when they are most likely to leave, the effects will be sustained. Early-career payments for maths teachers have now been in place nationwide for  several years and, notably, maths has gone from being a subject that used to have among the most severe shortages to a subject with relatively minor shortages.

Early-career payments have since also been rolled out to other shortage subjects, namely physics, chemistry and languages. However, there remains more to do. Despite the early career payments in physics, it still has the worst shortages of any subject. The retention payments for physicists should therefore be increased in value and/or duration. Computing still does not qualify for early-career payments at all, despite having the second worst shortages of any subject. There is therefore a strong case for expanding coverage of early-career payments to computing and other severe shortage subjects.

If the government is committed to providing enough specialist teachers for all pupils, and they are not willing to increase teacher wages generally, then increasing the value and coverage of targeted payments must be their policy priority.