Teachers’ Pension Scheme Costs: Effect on Universities

9. What recent assessment he has made of the effect on universities of increased teachers’ pension scheme costs.

The Department’s public consultation to gather evidence on the impacts of increased contributions to the teachers’ pension scheme for all TPS employers, including universities, for 2019-20 closed on 12 February 2019. Final funding decisions will be made in due course when the consultation evidence has been reviewed.

Modern universities across the country are deeply anxious about the upcoming charges to the teachers’ pension scheme, with one institution forecasting a 5% cut in staff members if the Government do not act. Will the Secretary of State urgently commit to supporting universities with these huge additional costs that have been earmarked for schools and colleges?

The Department’s initial analysis of each sector—state schools, further education, higher education, and independent schools—suggested that state schools and further education colleges would be most affected by the increase in employer contributions, so prioritised funding has been made available for them on this basis. However, final funding decisions will be made when the consultation evidence has been reviewed.

Does my hon. Friend agree that the most serious financial pressures are not on universities but on further education colleges and that it is time for a fresh, fair settlement for FE colleges, to ensure that learners get the investment in education that they deserve?

My hon. Friend is right that analysis has demonstrated that the FE sector would be affected. Obviously, FE colleges are most directly funded by Government grants, in contrast with higher education providers, which are autonomous bodies that are ultimately responsible for ensuring their financial viability.