You have probably seen the headlines shouting about a big win for educators. The government just shook hands on a two-year, 6.5% pay rise for school teachers and leaders across England. On paper, it looks fantastic. Dig a little deeper, and the reality for individual headteachers is far more stressful.
The Department for Education (DfE) accepted the School Teachers' Review Body (STRB) recommendations in full. Teachers get a 3.5% bump from September 2026, followed by another 3% in September 2027. Combined with earlier increases, the government boasts that salaries will have climbed 17% since the 2024 election. The average teacher salary is on track to cross £52,800 this autumn and £54,400 by late 2027. Discover more on a similar topic: this related article.
But here is the catch that the initial celebration hides. Schools have to pay for a big chunk of this out of their own pockets.
The Funding Gap That Puts Schools on the Hook
Ministers are injecting an extra £1.8 billion over the next two years to help cover the wage increases. It sounds like a massive pile of cash. The trouble is, it doesn't cover the whole bill. More reporting by USA.gov explores similar perspectives on the subject.
The government expects local schools to fund the first 1% of the pay rise each year from their existing, already stretched budgets.
What does that look like on the ground? Daniel Kebede, the general secretary of the National Education Union (NEU), pointed out that schools are being forced to find £460 million from budgets that are already at a breaking point. To put that into perspective, that £460 million shortfall is the financial equivalent of losing roughly 8,300 school staff members—specifically about 3,900 teachers and 4,400 support staff.
Unions are already making noise about potential strike action because of this exact loophole. Headteachers cannot magically create money. When you force them to absorb a percentage of a national wage increase, they have to cut something else.
Where the Cuts Will Actually Hit
If you think this won't impact classroom learning, you're being overly optimistic. When a school budget is squeezed, headteachers look at the few variable expenses they actually control.
- Support staff numbers: Teaching assistants and learning mentors are usually the first to face redundancies because their contracts are easier to modify than full-time teaching roles.
- Special educational needs (SEN): Extra resources, targeted interventions, and specialized equipment get scaled back.
- Class sizes: Schools often choose not to replace departing staff, leading to larger class sizes and less individual attention for students.
- Building maintenance: Routine repairs get delayed, meaning leaky roofs and broken heating systems stay broken longer.
Shifting Cash to Colleges and Cracking Down on Trust Executives
The deal isn't just about standard state schools. Further education providers and colleges are getting an extra £485 million over the next two years to tackle their own staff recruitment and retention issues.
Simultaneously, Education Secretary Bridget Phillipson is cracking down on the controversial world of academy executive salaries. For years, critics have slammed the massive pay packets given to multi-academy trust (MAT) bosses, with nearly 100 executives pulling in more than £200,000 annually.
A strict cap of £174,000 is being slapped on academy executive salaries. If a trust wants to advertise a pay package higher than that, they now need explicit government approval. Future pay rises for these executives will also be pegged directly to whatever standard classroom teachers get.
While teaching unions love this crack down on "banker-style" salaries, employer groups like the Confederation of School Trusts aren't happy. They claim the new rules add a slow, bureaucratic layer to recruitment that will stop trusts from landing top-tier leaders.
What Headteachers and Governors Need to Do Right Now
The wage increases kick in this September. School leaders cannot afford a wait-and-see approach.
First, the finance committee needs to immediately model the 1% budget strain for the upcoming academic year. Take your current salary expenditure, calculate the exact cost of a 3.5% hike for September 2026, and subtract the specific DfE grant allocation your school receives. The remaining gap is your immediate deficit.
Second, audit your vacancy list. If staff are leaving this summer, seriously evaluate whether you can restructure departments instead of hiring direct replacements.
Finally, communicate early with parents. If the budget deficit means cutting after-school clubs, reducing school trips, or delaying technology upgrades, be transparent about why it's happening. The public needs to understand that a pay rise for teachers shouldn't come at the cost of their children's daily resources.
