England teachers' 3.5% pay rise: schools question funding

England's 3.5% teacher pay rise, awarded from September 2025 and followed by a proposed 3% uplift in September 2027, faces a fresh funding dispute after the Department for Education quietly removed a table explaining how schools would cover the cost.

Education Secretary Lucy Powell announced the award in September, telling the National Education Union that savings from a Local Government Pension Scheme revaluation would cover it. A DfE blog published on 16 September 2025 quantified that revaluation as a 4.9 percentage point reduction in employer contribution rates.

What changed in the DfE blog?

Since Powell's announcement, the department has edited the post at least twice. It removed a line stating the cost reduction would "not be clawed back" and pulled the funding table altogether. The current version simply asserts that schools can meet the award "at a national level."

For a headteacher in a multi-academy trust, that language matters. "National level" is not the same as per-school affordability, and the union representing teachers says the gap is real.

Where does the money come from?

• 3.5% pay rise from September 2025
• A further 3% recommended for September 2027
• Funding sourced from a 4.9-point cut in LGPS employer contribution rates
• DfE describes the cut as a "substantial improvement" in schools' financial position

The Department for Education told Personnel Today: "The pay award remains the same. What has changed is the affordability position following the recent valuation of the LGPS, which has reduced schools' costs and strengthened schools' ability to meet the costs of the award at a national level."

Why are unions pushing back?

NASUWT general secretary Matt Wrack argues the LGPS savings were already sitting in school budgets. "Addressing pay and workload must be part of a wider commitment to a long-term substantial increase to education funding, in order to ensure every child can receive a world-class education," he said.

The union has asked Powell to republish the original funding table and to specify which services schools should cut to balance the books. It also wants fresh talks on the 2027/28 award, currently pencilled in at 3%.

What happens to the NEU strike threat?

The National Education Union opened a strike ballot in May 2025 and suspended it on 24 September after Powell confirmed the extra funding. With the funding source now contested, the ballot remains a live option if the dispute over the 2027/28 round reopens.

What this means for school leaders and teachers

For a classroom teacher, the headline 3.5% is intact on paper, but the path to it has narrowed. For school business managers, the removal of the funding table leaves a planning hole that will surface in the next budget cycle. For the wider labour market, the episode shows how a public-sector pay award can be reclassified from "additional" to "absorbed" funding within weeks of announcement.

The DfE has so far declined to republish the table. Wrack's call for "urgent discussions" on the 2027/28 round will set the tone for whether the next pay review triggers a fresh industrial action ballot.