Good news on Teachers’ Pension Scheme contributions (though only in Scotland)

The Scottish Funding Council has announced funding for universities to offset the increased employer costs from the Scottish Teachers’ Pension Scheme (STPS), as well as from a similar increase in NHS pension employer contributions (which will affect clinical academics – that’s why there’s a small share of the funding going to some of Scotland’s older universities). But by and large this is a measure to support the modern universities that are required to pay into the STPS. There’s also £7.68m for the college sector.

Where’s the money coming from? It might surprise you to learn that, arguably, it’s a consequence of Westminster’s decision to compensate schools and colleges in England for increased Teachers’ Pension Scheme costs – though not England’s higher education sector. I went over the background to this story back in June, if you can cast your mind back that far.

At that point we were waiting for the general election to be over so that Westminster could confirm the Barnett consequentials due. This came and went, with only the occasional update over the autumn saying that determinations were still ongoing.

This week’s news will certainly be very welcome at affected universities, and indeed it’s a bit more money than what was on offer before – a previous support fund, removed last spring, offered £4.8m in 2023–24.

When I last wrote about this topic I suggested it was an awkward state of affairs given that Westminster has actively avoided providing any kind of help with TPS, a situation that has persisted after the change of government. Skills minister Jacqui Smith last week limited her comments to “considering the issue carefully,” though meetings between the government and UCEA are ongoing – and the ask now seems more to be for flexibility to leave the scheme rather than hope for financial support. Employers and trade unions have also written jointly to the government raising the alarm over the potential for costs to employers rising even further in the next valuation (and if you’re reading that latter letter and wondering what a SCAPE rate is, here’s your guide).

In Scotland the next question, and a similar one, is how much cash will be due to Scotland’s public sector as a result of increases to employer national insurance contributions in Rachel Reeves’ autumn budget – and then how much of that the Scottish government can be persuaded to pass on to universities, given that Scotland has a relatively larger public sector than England. As far as we know, the Scottish government is still waiting for confirmation from Westminster.