12th JUNE 2003

SUMMARY

This report advises Members of the overall financial position in relation to the McCrone Teachers' Settlement, including additional funding for Highland, and seeks agreement on the distribution of the resources. In addition, it proposes that the Council seek a permanent solution to the issue through the inclusion of supersparsity in the next Scottish Executive financial review.

Signature:

Designation: Director or Education, Culture and Sport

Signature:

Designation: Director or Finance

Date: 4 June 2003

Ref: BR/AC

Background Papers

A TEACHING PROFESSION FOR THE 21ST CENTURY - 2003-2006

We have been discussing the level of resources local authorities will need to implement the final stages of the agreement ‘A Teaching Profession for the 21st Century’. I am glad that we have now reached agreement.

Attached at annex A to this letter is a copy of the joint statement on the cost of implementing the agreement. This statement identifies the key cost areas over the next 3 year period based on the formula which was used in calculating the original agreement. That formula is based on teacher numbers in 2000. Even taking into account the additional teachers required to meet class contact time reductions in the Teachers’ Agreement, we know that overall teacher numbers are declining as a result of falling school rolls (40,000 fewer pupils by 2005/06). To reflect this, I have anticipated savings of £15m in year 2 and £22m in year 3.

We have agreed that officers commence work as soon as possible to ensure that these are realistic figures. This exercise will need to feed into the annual teacher workforce planning exercise which projects future demand for qualified teachers. The results of this exercise will be available towards the end of 2003/04 allowing current assumptions to be revisited if necessary. That work will also inform the decisions we make in the spending review planned for 2004.

I have also made the assumption that local authorities will continue to provide funding of £25.5m as agreed at the time of the original agreement. This will be provided on a continuing per annum basis over the current spending review period.

I am providing additional resources to fully cover the remaining gap, as well as providing additional resource in 2003/04 to assist local authorities with management restructuring. The total of the new resources will be £80m over three years, divided as follows:

2003/04 - £25m - (includes £7m for authorities with a current under-funding issue; see below)
2004/05 - £20m - (includes £3.5m for authorities with a current under-funding issue see below)
2005/06 - £35m

In the total allocation set out above, we have agreed that £10.5m is being made available to assist councils who have a current under-funding issue due to a historic funding difficulty. £7m will be available in year 1 and £3.5m in year 2. This funding will be phased out in year 3. It is anticipated that this will give councils the opportunity to address the current problems they are facing. Given the concerns raised by some of these authorities, we recognise that we will wish to look at issues of super-sparsity in SR2004.

The new job weighting exercise agreed through the Scottish Negotiating Committee for Teachers will allow authorities to reward promoted staff according to the nature of the post they hold. The protection offered through salary conservation has been necessary for an equitable solution for the staff involved, but inevitably brings short term additional costs. Given the recent agreement at SNCT on job sizing, we have been able to take full account of the impacts of this salary conservation, which will of course reduce over time. The total figures set out above include £10m in year 1, £12m in year 2 and £9m in year 3 to cover the costs of conserved salaries.

In year 1, we have also agreed that we should allocate £8m through normal GAE distributions to help meet the costs of the Agreement, in particular the costs of management restructuring, though I will expect to see a light touch plan from each Authority as to how they propose to commit this funding. I also anticipate councils being able to utilise their job sizing allocations, as well as savings in 2003/04 from falling school rolls, in a flexible manner to achieve more effective management structures.

You have also agreed that as the costs of job-sizing and management restructuring reduce, any funding freed up should be used to assist in meeting the salary costs of chartered teachers. We have agreed that we will of course need to monitor carefully how the funding for, and implementation of, the chartered teacher programme is developing, given its key importance in maintaining and rewarding classroom expertise, and again I would anticipate officers commencing work on this as soon as possible to ensure full funding of the costs.

I know you have also had a concern around support staff. The Agreement states that the resources should allow the equivalent of approximately 3,500 support staff to be employed. The figure was not intended as an inalienable target of numbers employed, but an indication of the scale of resources available. Quite rightly, Authorities are using the funds both to cover non staff costs, and to employ a wide range of different support staff, from class room assistants to School bursars who bring with them variable salary levels. In these circumstances success will not be measured by whether the figure of 3,500 is achieved either globally or proportionately in an individual Authority's area. What is important is that authorities are able to deliver full value for the funds they deploy, allowing them to remove the non teaching tasks in Annex E of the Agreement from teachers' duties.

We have also agreed that the Executive and CoSLA should work together to agree a new methodology for calculating the cost of teachers’ pay. Once agreed, this new methodology will be used for work in SR2004 on the cost of the teachers’ agreement.

In general, I believe we have reached agreement on the cost of implementation and the joint statement reflects this. The funding being made available enables councils to take forward implementation in full. We agree that further monitoring is required and that work should start early in preparing for the next Spending Review.

ANNEX A

* representing underspend to be earmarked in 2003/04 for carry forward to 2005/06 to meet expenditure.