Universities accuse the Treasury of levying a ‘stealth tax’ to fund teacher pensions

The Department for Education (DfE) has revealed that employers’ contribution to the Teachers’ Pension Scheme (TPS) will rise from 16.48 per cent of their salaries to 23.6 per cent. The change, which comes into force in September, will see 70 universities pay an additional £142 million in the first year alone. The Telegraph reports.

The Department for Education will provide funding to help state schools meet the extra costs for at least the first year of the new scheme, but private schools and universities will need to foot the bill themselves.

Alistair Jarvis, chief executive of Universities UK said he is  “disappointed” that universities have not been given any extra funding, adding: “This is effectively a stealth tax to boost the Treasury’s coffers.

“Ultimately, this will have to be paid for by diverting funding from other priorities.

Today’s announcement in England is bad news for university students, staff and communities that benefit from universities.”

The change will also cost private schools an extra £110million from 2019-20 and nearly £200million the following year. 

Private schools are now faced with either pulling out of the teachers’ pension scheme, making them less attractive to new teachers, or raising fees.

Julie Robinson, chief executive of the Independent Schools Council, said schools are facing “significant cost increases” due to the changes.  

Read more Universities accuse the Treasury of levying a ‘stealth tax’ to fund teacher pensions

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