Memorandum by the National Union of Teachers
(NUT) (AH 44)
INTRODUCTION
1. Housing affordability is a key issue
for teachers. The problem of affordable housing has implications
for teacher supply. In particular, the high cost of housing combined
with inadequate pay levels for teachers is likely to deter many
graduates from entering the teaching profession and cause serving
teachers to leave the profession. Teacher pay levels are not sufficient
to enable teachers to be able to comfortably afford to buy a home.
RECENT DEVELOPMENTS
2. Although in recent months house prices
have increased at a lower rate than previously, they remain high.
The Nationwide Building Society reported in its Quarterly Review
of 29 September 2005 that the average property price in the United
Kingdom was £158,987 in the third quarter of 2005.
3. Nationwide reported that activity levels
had increased in the third quarter of 2005 with improvements in
buyer enquiries, expected prices and agreed sales. This may be
a sign that house prices will continue to increase, albeit at
a slower pace than in previous years.
4. Although there is a significant regional
pattern to house prices, the gap between prices in the south of
England compared with the rest of the UK has been reduced. Nevertheless,
teachers in London and the south of England face significantly
higher house prices.
5. Teachers in London and the Fringe Area
receive higher pay than those in the rest of England and Wales.
The pay premia in these areas do not, however, compensate for
the higher cost of housing in London and surrounding areas. Teachers
in Inner London receive a salary premium of between £3,639
and £6,288, depending on their position on the pay spine.
Teachers in the early years of their careers, paid on the Main
Scale, receive significantly less than more experienced teachers
who have crossed the performance threshold and reached the Upper
Pay Scale, or who are paid on the Leadership Spine. The additional
value of pay on the pay scales for Outer London and the Fringe
Area is around the same whatever a teacher's place on the pay
scales.
6. Other teachers are in areas of particularly
high cost housing and receive no additional pay premium, unlike
other public sector workers. For example, police officers in the
local authorities bordering London receive additional pay. This
is currently worth £2,000 for police officers in Essex, Hertfordshire,
Kent, Surrey and Thames Valley. With the exception of Surrey,
where teachers across the county receive the Fringe Allowance,
additional pay in these areas is only available to teachers in
a small number of places. For example, in Kent the only teachers
who receive the Fringe Allowance are those in Dartford and Sevenoaks.
The Fringe Allowance is worth around £900 compared to the
£2,000 for police officers.
7. Police officers in Bedfordshire, Hampshire
and Sussex receive additional pay worth £1,000. Aside from
those in Crawley, West Sussex, teachers in these areas receive
no additional pay at all.
GOVERNMENT HOUSING
HELP FOR
TEACHERS
8. The Government's response to the problem
of housing affordability for teachers and other public sector
workers has been the introduction of a number of initiatives.
The most relevant initiative for teachers has been the Key Worker
Living Programme (KWLP) and its predecessor the Starter Home Initiative.
9. The help available under schemes such
as these is limited by the overall budget made available, which
in turn limits the number of teachers who receive assistance.
Under the Starter Home Initiative some 3,000 teachers received
help between 2001 and 2004. In the context of a teacher workforce
of some half a million, this represents a very small minority
of less than 1%. The authors of an evaluation of the Starter Home
Initiative conducted for the Office of the Deputy Prime Minister
and published in August 2005 noted that as the initiative came
to the end of its life demand exceeded supply in many areas
10. The KWLP covers certain parts of the
country only. Although housing "hotspots" in areas outside
London and the south of England exist, no help is available to
teachers in such areas under the KWLP.
11. These schemes tend to be complex in
practical terms. The KWLP, for example, is operated by a number
of different Zone Agents across the country with different eligibility
criteria. The lack of simple, clear criteria for help further
reduces the effectiveness of these schemes in targeting need.
The Sunday Express reported on 17 July 2005 that less than a fifth
of the 27,465 applications to the key worker scheme in 2005 had
been completed or were at an advanced stage.
HOUSE PRICES
AND TEACHER
PAY
12. According to the Nationwide Building
Society's Quarterly Review, house prices in England ranged from
£124,488 (North) to £241,898 (London). In Wales, house
prices were £139,212.
13. The table below shows the pay a teacher
would need in order to afford the average price in each area of
England and in Wales. The calculations are based on the assumption
of a 10% deposit and a mortgage of three times salary.
| Pay Needed (£)
| |
North | 37,346 |
|
| Yorkshire & Humberside | 41,876
| |
| North West | 43,814 |
|
| East Midlands | 43,429 |
|
| West Midlands | 45,800 |
|
| East Anglia | 48,377 |
|
| Outer South East | 55,790 |
|
| Outer Met | 66,011 |
|
| London | 72,569 |
|
| South West | 53,073 |
|
| Wales | 41,764 |
|
| |
|
14. According to the latest Teachers' Pay Survey for
the School Teachers' Review Body, most classroom teachers were
paid on Upper Pay Scale 1 or below. Upper Pay Scale 1 currently
generates a pay level of £30,339 outside of London and the
Fringe Area. On the basis of a 10% deposit and a mortgage of three
times salary this would not be sufficient to afford the average
house in any area of England, or in Wales.
15. Teachers would need to be paid on the Leadership
Group pay spine in order to afford the average house on the basis
of 10% deposit and three times salary. The Leadership Group is
comprised of head teachers, deputy head teachers and assistant
head teachers. Aside from head teachers, most other teachers on
the Leadership Group are paid on the first 12 points of the Leadership
Group pay spine, currently worth £33,249 to £43,611
outside of London and the Fringe Area. This means that even many
teachers in positions of leadership in schools would have difficulty
in affording the average house in their region.
HOUSE PRICES
AND TEACHER
SUPPLY
16. High housing costs inhibit the recruitment and retention
of teachers. Teaching has to compete effectively against other
graduate employers in order to support recruitment and retention.
Serving and potential teachers can see that other graduate employers
offer higher pay than teaching.
17. Incomes Data Services (IDS) has estimated average
graduate starting pay in 2005 as £20,769. This is some 8%
higher than starting pay for teachers from 1 September 2005. IDS
research on pay progression after five years shows that the average
graduate then benefits from faster pay progression than teachers.
In pay terms, teachers start behind other graduates and then lose
further ground in the early years of their careers.
18. It is inevitable that with low pay relative to other
graduates, teachers will experience problems in affording housing.
These problems are acute in areas of differentially high housing
cost.
19. The link between high housing costs and teacher supply
problems is demonstrated by the particular recruitment and retention
problems faced in London. Under the teachers' pay structure schools
can at their discretion pay recruitment and retention incentives
and benefits. The latest data show that the proportion of full-time
qualified classroom teachers in receipt of such payments was 26%
in Greater London, compared some 1 to 4% elsewhere in England
and Wales.
20. High house prices have significant knock-on effects.
Many teachers find that they cannot afford to live close to the
schools in which they work. This means that they then face significant
and unavoidable travel costs. They also have to spend a significant
amount of time travelling to and from work. These factors are
likely to increase stress and to adversely affect teachers' work/life
balance, increasing the likelihood of teachers seeking alternative
employment.
THE NUT'S
APPROACH
21. We believe that a holistic approach is needed to
the problem of housing affordability for teachers.
22. Notwithstanding the limited "catch-up"
of the rest of England and Wales with London and the south, house
prices in the latter areas remain significantly higher. An effective
solution to this problem needs to involve pay levels, pay allowances
and fully funded initiatives such as housing associations, preferential
loan arrangements and shared ownership schemes. Other initiatives
that might assist teacher recruitment and retention in London
and the South East should be examined, such as properly financed
childcare schemes and support for childcare costs.
23. The NUT's view is that the cost compensation approach,
under which additional costs such as high relative housing costs
are quantified, should be used to determine the value of pay allowances
for areas of particularly high cost such as London.
24. In general terms, teachers need to be able to afford
housing in all parts of England and Wales. That they cannot do
so currently shows that teachers do not receive the proper, professional
and competitive pay levels that the profession should command.
Other graduates receive higher pay than teachers and this gap
must be closed if the teaching profession is not to suffer further
supply problems in the future. The discrepancy between house prices
and teacher pay is a key indicator of the need for significant
increases in teachers' pay.
| 
