Lifting the cap on the pay of teachers and other public sector workers would cost the government less than previously thought, a thinktank has said.
The IPPR said a significant amount of any money used to lift the pay cap would be returned to the Treasury almost immediately in the form of higher tax receipts and lower welfare payments.
The finding comes ahead of next week’s Budget and amid pressure on chancellor Philip Hammond to increase funding for schools and increase public pay above the current 1 per cent cap.
In September, education secretary Justine Greening told Tes that “competitive pay” was needed to attract and retain good teachers.
Today’s report cites NASUWT findings from last year that a school teacher outside London who was on £36,624 in 2010-11 would have suffered a £2,800 real-terms pay cut by 2017-18.
This would rise to £3,794 if the public sector pay cap was retained until 2019-20.