The Settlement of Equal Value Pay Claims - Update for Schools

FAO Headteachers & School Finance Managers

15 December 2011

The issue of the charging of the cost of settlements relating to equal value pay claims continues to be a priority for the Schools Forum. Forum members are acutely aware, from discussions within meetings and from contact with individual schools, of the difficulties created for schools in their budget planning by the timescale for the settlement of these claims.

The Forum has previously written to schools to explain the context within which the overall cost of the settlement of pay claims in schools must be managed. Given the tightness of Dedicated Schools Grant settlements, the protection afforded to school budgets within these settlements and the level of surplus balances currently being held by schools, the Forum’s expectation is that these costs willnormally be met by individual school budget shares. Although charges for settlements in previous years have been capped, with a proportion of costs being paid for by the DSG, the ability of the Forum to support schools further in this way is very limited.

The Forum is conscious however, of the impact that the charging of the cost of settlements may have on the budgets of individual schools. As stated in previous communications, the Forum has established a working group, of headteachers and Local Authority officers, to look at the options that are available to manage the cost of these settlements, including what options are available to ease or to spread the cost, where this cost will place severe financial pressure on a school. The key information that the working group requires to progress this work is the actual cost of settlements for staff in each school. This information is not yet available. The Local Authority is currently making offers to individual employees and this process will continue into the new year.

The Forum will continue to discuss this issue as a priority in its meetings in January and February and will provide more information for schools as soon as it is possible to do so. This will include guidance on year end reporting issues for March 2012 balances. The current position is:

  • The expectation is still that the cost of settlements will normally be met by individual school budgets
  • Where a school has already made financial provision e.g. via an Intended Use of Balances scheme from March 2011 or within the school’s 2011/12 budget, this provision must be retained
  • Although the Forum and the Local Authority would strongly encourage schools to look at different budget scenarios and contingency planning, schools should not seek to take any significant action e.g. staff redundancies until the actual cost for the school and the options available to the school to manage this cost are confirmed. It is anticipated that the cost to each school will be clearer early in the new year. Schools should always work closely with their HR support
  • The Forum will be assessingthe options for spreading or easing the impact on individual schools, where the charging of the cost of settlements will place the school under severe financial pressure. This does not necessarily mean that the costs relating to staffat an individual school will not be charged to that school’s budget. The Forum will also be considering the options available for establishing some form ofrepayment scheme, where the cost could be managed over more than one year. However, the Forum has not yet made any recommendations on this. The options cannot be assessed until the cost to each school is known more clearly early in the new year
  • At the Forum meeting on 14 December the Local Authority indicated that, for offers calculated so far, the average cost of each settlement is somewhere between £2,000 - £3,000. It is expected that the cost of settlements in total will be in the region of 1/3of the value of the figures produced by the ready reckoner (the ready reckoner shows a maximum cost). The Authority estimates that up to 200 offers may have been made by the end of 2011. Detailed information on the total cost of those offers, & the average cost of each, will be provided to the next Forum meeting on 18 January.

If you have any questions on this update, please contact Andrew Redding 01274 385702. If you have more specific questions on the process for the settlement of equal value pay claims, or the cost of settlements themselves, please contact Richard Hammond 01274 434931.