DFE estimates TPS changes will increase further education provider costs by £142m

The Department for Education (DFE) has estimated that increasing the employer contribution to the Teachers’ Pension Scheme (TPS) for 2020/21 will increase the cost to further education employers by £142m.

This is higher than the initial estimation of £130m for 2019/20.

Furthermore, the DFE predicts that the changes will increase employer costs for the independent sector by £191m, while costs for higher education institutions will rise by £142m.

Association of Colleges deputy chief executive, Julian Gravatt tweeted: “I calculate this implies £1,275m for state-funded schools. DFE promises funding for state schools and colleges but for how long?”

Minister of State for Education, Nick Gibb in a written parliamentary answer stated: “Funding arrangements for the increased costs will be considered as part of the next spending review.”

The TPS changes, based on the 2016 actuarial valuations of public service pension schemes, will mean employer contributions to TPS will rise by 7.2 per cent to 23.8 per cent, and 5.2 per cent to 22.4 per cent for TPS Scotland.

In his answer, Gibb concluded: “The higher education establishments that participate in the TPS mainly consist of the universities established from 6 May 1992 onwards. A full list of the establishments involved will be placed in the libraries of both houses.”

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