What is the cost of living crisis, and why are we talking about it?

The cost of living crisis is the term used to describe the fall in ‘real’ disposable incomes that the UK has experienced since late 2021.

Cost of living infographic (1)

Causes of the increasing living costs include inflation, tax increases, and a lack of wage and benefit increases. Within this blog, we will look at the effects of the increasing living costs on schools and staff. We will also consider the cost of living situation as a factor contributing to teacher burnout and worsening mental health amongst school staff.


How is the cost of living crisis affecting education?

Trusts and Schools 

Energy bills have been a flashpoint of the increased living cost crisis, and headteachers have already shared their concerns about how school energy bills look set to rise considerably. The National Association of Head Teachers (NAHT) states that, on average, surveyed members anticipate a 106% increase in energy costs, with 16% expecting an increase of 200% or more. These numbers are astronomical on a trust level, with TES reporting one larger trust expecting costs to almost triple from £5m to £14m.

MAT respondents to the National Governance Association Survey had significant concerns regarding the long term and whether they will be able to afford what the organisation wants to achieve. NGA highlighted in their most recent report that only 41% of MAT  respondents believe that their school or trust is sufficiently funded to deliver its vision and strategy to meet the needs of all pupils, compared to 44% in 2021. 

Not only this, but NGA suggests in its report that respondents considering their trust to be financially sustainable with current levels of funding and income has dropped.  37% of MAT trustees in 2021 thought their trust was financially stable, with 35% in 2022, with local governor respondents even less confident, dropping from 31% to 25%.

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NGA’s report highlights some of the key challenges perceived by MATs and trusts. The information collected by NGA suggests that some schools and trusts may be considering ways to balance the books whilst also looking to achieve their vision and strategy to meet the needs of all pupils on reduced budgets.

Some schools in the UK have spoken out about the cost-cutting measures they may have to take to ensure they can balance the books. Some measures recently discussed in the media include cancelling school trips, staffing cuts, and lowering per pupil spending. These are all ways schools and trusts are looking to reduce the financial impact of the Increased cost of living. These suggested measures are often a part of schools' vision and strategy to meet the needs of pupils.

Another cost schools have to budget for this year is the 5% pay increase introduced by the DfE. A 5% unbudgeted pay increase for staff is a substantial challenge for trusts already struggling to plan forward financially to achieve their goals and balance their budgets.

Leora Cruddas from the Confederation of School Trusts was recently quoted by SchoolsWeek, warning that the pay settlement was “not affordable within existing resources, especially in the context of unprecedented energy costs and other inflationary pressures for schools”. Leora also stated, "It is essential that the government commits to a funded pay settlement. Without funding to meet this pay settlement, many schools and trusts will not be able to set a balanced budget.” 

Teachers and Staff

National Foundation for Educational Research calculates that average teacher pay fell 7-9 per cent in real terms when looking across the last decade and looking at the 2010/11 level in real terms. They also highlight that “teacher pay has lost competitiveness relative to the wider economy over the last decade, and the 2021/22 teacher pay freeze meant that teacher pay fell sharply in real terms, losing further competitiveness.” During the same period, the rest of the economy's average earnings increased by around two per cent.

Dr Mary Bousted, the joint general secretary of the NEU, was recently quoted in The Guardian stating that teacher workloads, inspection systems, and the effects of real-term pay cuts have greatly affected teacher wellbeing and their desires to continue doing the job. In July 2019, Ofsted published research that showed their own inspections were among a host of reasons for poor staff wellbeing and increased risk of teacher burnout. Within the Education Staff Wellbeing Charter 2021, Ofsted again identifies their own inspections as a cause of stress. The Charter highlights the importance of staff wellbeing and calls for schools and trusts to prioritise staff wellbeing and mental health.

Julie McCulloch, director of policy at the Association of School and College Leaders, was recently quoted suggesting that poor mental health and overall staff wellbeing had become “a really significant problem”. Julie speaks out on wellbeing, suggesting that workload and pay were the most apparent reasons education currently has a very high staff turnover rate. Quoting 40% of teachers are now considering leaving within ten years of qualifying. This is reflected in our own survey, which saw the proportion of staff considering resigning increase to 42% in the 2021/22 academic year, up from a low of 34% in 2020/21.

With pay already contributing to teachers' job satisfaction, worsening mental health and wellbeing, and the cost of living continuing to worsen, this could see a cycle of teachers' and school staff retention rates, teacher burnout, and worsening mental health.

The recent 5% increase in pay for existing teachers and 8.3% for new teachers equates to around £2,100 for a teacher earning the average wage of £42,400 a year and sees the starting salary outside of London increase to £28,000 (a step toward the government's goal of £30,000). Whilst the pay rise was welcomed by some as a way of easing some of the financial pressures in the current climate, others have gone as far as to say that the increase doesn't go far enough in the context of higher rates of inflation and to recover from previous real-term pay cuts. NASUWT and NEU are both proposing ballots for industrial action this Autumn. 

Summary

In summary, the education sector is looking to face another difficult year. Financial challenges, Teacher Burnout and worsening mental health, cuts, inspection changes and policy developments are all contributing to growing concerns surrounding staff retention. Teacher pay rises have caused uncertainty for school leaders struggling to balance their budgets, and teachers are still facing a real-term pay cut for the year ahead despite their first pay rise in recent years. These factors, combined with the cost of living crisis, suggest that staff wellbeing and retention could be affected, and schools and trusts may be calling out for governments to do more to support school funding. 


What do we know about staff experience and wellbeing?

Teacher Workload

Our blog on how to avoid teacher burnout and support staff with their mental health discusses the ways to identify staff burnout and highlights some of the causes, with more teams responding negatively to questions directly related to workload and feelings of being overworked. As 2021/22 was the first time schools went an entire academic year without periods of home-schooling, it may be that this transition period led to increased staff workloads.

Dr Mary Bousted highlights the effect that workloads, inspection systems, and real-term pay cuts have had on teacher wellbeing and their desire to continue doing the job. These factors, combined with the increased cost of living, suggest that staff wellbeing and retention could continue to worsen, and even more staff could end the year considering resigning. Some may even consider leaving the profession altogether.

🟢 Find out more about your staff's opinions on team communications and leadership. 🟢

Leadership Dynamics

On the whole, staff responses to questions on leadership dynamics were less positive in our most recent look at findings from our Staff Experience and Wellbeing Survey for 2021-2022. Staff were less content with the communication, leadership style, support and approachability of their leadership teams in schools. 

With staff burnout and worsening mental health a real possible sticking point this year in schools, being able to turn to leadership to voice work-related concerns is essential. Having confidence that your leadership teams are actively working to address your professional needs and resolve your concerns would significantly impact teachers' confidence. It may help staff feel like they aren’t alone, and staff may also feel they can approach team members for support when facing burnout.

🟢 Find out more about your staff's opinions on team communications and leadership. 🟢

Staff Retention

Our report on Staff Retention in Academies comments on the retention landscape, presenting data that can be used to reflect upon the effects of teacher burnout and staff wellbeing. The pandemic caused uncertainty for many industries. In education, the percentage of staff at risk of resigning dropped to 34% for those who completed our staff wellbeing survey. However, as things have started to return to the new normal in schools, that number has increased to a record high of 42% of staff considering resigning. 

Staff retention and wellbeing over the years

The number of teachers considering leaving the profession has remained the same over the last two years. There is a possibility that staff could be more inclined to leave the sector altogether to seek better financial rewards following real-term pay cuts and increased living costs if they are also struggling with workload, wellbeing and mental health.

Likelihood of leaving the profession if resigned

School leaders need to have their fingers on the pulse regarding staff experience and wellbeing. Whilst many of the concerns and issues present in the staffing body require consistent effort over a long period, there are always areas that can be worked on immediately to improve staff experience and overall well-being in the short term. 


What can education leaders do to support teacher wellbeing during the cost of living crisis?

No measure can solve the problem alone; analysis and keeping your finger on the pulse of staff wellbeing, mental health, and job satisfaction is one way of checking in with your team. Regular check-ins with staff, surveys, and 1-1’s are all ways to open the conversation with members of your teams. Craig Vincent, Partner, Head of HR Consultancy Services at Stone King LLP, compiled a selection of possible ideas for trust leaders to support retention in academies in our most recent report on the topic.

Suggestions include methods of measuring retention and turnover, understanding causes of turnover and Improving staff retention,

Within the improving staff retention section of our report, the following ways of supporting staff are mentioned, which can support and create an environment where staff well-being and mental health are considered much more by staff.

  • Increased flexibility – more part-time workers.
  • Home working – allowing support staff and teachers to work and plan from home.
  • Dedicated wellbeing strategies such as the education staff wellbeing charter.
  • Introduction of wellbeing champions.
  • Becoming a learning organisation where employee needs are central to every decision made.
  • Conversations regarding career development and succession planning with employees.
  • Becoming inclusive in your approach to people management and school leaders adopting a genuinely inclusive approach to people management.

Some of these suggestions seem like extensive and radical changes. Craig recognises this and suggests smaller steps that may support these overall goals to support staff wellbeing and, in turn, retention.

  • Improved conversations with staff through performance management in September.
  • The development of a wellbeing strategy.
  • The development of an inclusion strategy.

For more information on ways to avoid teacher burnout and support mental health in your workplace, look at our other blog on this topic.

If you're a teacher or would like to guide a teacher to help, don't wait for a crisis. Call the following helpline, 08000 562 561 or text MIND in partnership with Twinkl. Further support can also be found on the BBC website.

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