Labour Education Secretary Lucy Powell has reversed her party's previous decision not to fully fund a 3.5% pay increase for teachers this year and 3% next year, allocating an additional £500 million to address union concerns and prevent potential strikes. This change allows schools to use savings from reduced pension contributions to cover the full cost of the pay rise, responding to threats by the National Education Union (NEU), which represents 500,000 members. The NEU welcomed this move as a significant step towards fully funded teacher pay increases and an end to financial strain on schools.
Written by the local model on 2026-09-16,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
In a bid to prevent potential teacher strikes, schools in England are receiving around £500 million in additional funding from the government. The National Education Union (NEU), which had threatened strike action due to concerns over how teachers' pay increases would be funded, welcomed this move as significant progress. Initially, schools were expected to fund part of the 3.5% pay increase for teachers out of their own budgets; however, NEU leaders strongly objected to this plan, arguing it was unfair to expect schools to cover a substantial portion of the wage rise from existing funds. The government has now decided to use savings from reduced contributions to the local government pension scheme to fully fund the pay raise, alleviating concerns about strike action planned for next month. This shift in policy follows weeks of negotiations between the NEU and the Department for Education led by current Secretary Lucy Powell, who replaced Bridget Phillipson during these discussions.
Written for “Teacher Pay Funding Deal England” on 2026-09-17,
grounded in this article and the 2 other(s) covering the same event.
Why this leaning score
The article's own words the score was based on. Each is quoted
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stored, so you can find it in the original.
-
Lucy Powell has caved in to union threats of strikes with a last-minute U-turn to provide more money for teacher pay rises
right describes Labour's decision as a capitulation to union pressure
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The Education Secretary has backtracked on a previous Labour decision not to fully fund the increase, which is 3.5 per cent this year and 3 per cent next year.
right frames Labour's change of policy as an about-face
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Schools had been expected to fund roughly half of the rise through their existing budgets – with the rest coming from additional government funding.
right suggests that schools should bear a significant portion of the cost, implying fiscal responsibility
Leaning score +0.35 for article 13881 (high confidence, 3 verified quotes) · logged 2026-09-16
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Lucy Powell has caved in to union threats of strikes with a last-minute U-turn to provide more money for teacher pay rises.
asserted
Powell → see → rises
The Education Secretary has backtracked on a previous Labour decision not to fully fund the increase, which is 3.5 per cent this year and 3 per cent next year.
asserted
which → backtrack → increase
Previously, schools had been expected to fund roughly half of the rise through their existing budgets – with the rest coming from additional government funding.
asserted
rest → expect → funding
However, the National Education Union (NEU), which has 500,000 members, said in the summer it would hold a ballot for strikes this autumn if the Government continued with its plan.
asserted
Government → have → plan
The NEU previously estimated schools would have to find about £460million from their budgets.
asserted
schools → estimate → budgets
Walk-outs had been expected to take place after Christmas.
asserted
outs → expect → Christmas
But in a letter to NEU general secretary Daniel Kebede, Ms Powell today confirmed schools can use savings from lower pension contributions to fund the pay rise this year, with an estimated £500million to be made available.
asserted
schools → confirm → 500million
The NEU said this amounts to 'a fully funded pay increase for all teachers throughout England', hailing it as 'a significant step'.
Lucy Powell has caved in to union threats of strikes with a last-minute U-turn to provide more money for teacher pay rises (pictured: NEU General Secretary Daniel Kebede)
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Powell → say → rises
Schools Week reported that Ms Powell wrote in her letter: 'I understand you are concerned the funding available in 26-27 is insufficient to cover the costs of the recent pay award.
asserted
funding → report → award
I am therefore pleased to be able to update you that recent revaluations to the Local Government Pension Scheme will see a 4.9ppt reduction in employer contribution rates and deliver significant savings on schools' pay bill for support staff.
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revaluations → update → staff
We can confirm this reduction in costs will not be clawed back, and as such, we are confident that schools will be able to cover the costs of the teacher pay award, at a national level.
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schools → confirm → level
Mr Kebede responded today: 'Finally, we have a government that accepts the reality that any teacher pay award must be fully funded.
'
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award → respond → reality
Plugging the £460 million black hole in school budgets signals a welcome return to reality, and a message of hope for the entire school community.'
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Plugging → plug → community
He said the 'significant ground conceded by government' was 'a consequence of NEU members' 'willingness to take a stand'.
asserted
ground → say → stand
'Schools have been running on empty for far too long,' he added.
asserted
Schools → run → ?
'Leaders simply could not afford to fund the pay award as set out by the previous Education Secretary.
uncertain
Leaders → afford → Secretary
The new administration has accepted that it is wrong to force schools to make cuts to education just to make ends meet.'
asserted
ends → accept → education
He added: 'We hope to work with this government to ensure that education is truly valued in this country.
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education → add → country
We hope today marks an important turning point, and one we as a union will aim to build from.
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we → hope → union
We must make austerity in the classroom a thing of the past.'
asserted
austerity → make → past
The NEU was due to hold a formal strike ballot which would open in two-and-a-half weeks.
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which → hold → weeks
The union's executive now plans to discuss its response to Ms Powell's letter on September 24.
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executive → plan → September
Announcing the 3.5 per cent rise in July, the government said 1.8 per cent was expected to come from schools' existing budgets.
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cent → announce → budgets
The Aporia
