Recommendation 9

Staff costs typically account for around two-thirds of colleges’ running costs, and have been rising in recent years. Colleges usually offer the Teachers’ Pension Scheme to their academic staff and the Local Government Pension Scheme to their support staff. Employer contributions to the Teachers’ Pension Scheme rose from 14.1% to 16.48% in 2015 and to 23.68% in 2019. This means that the current contribution rate is 44% more than in 2015 and 68% more than the rate before 2015. The government is providing extra funding to FE providers to cover increased contributions in 2019/20 and 2020/21, but colleges are worried about the affordability of contributions in future years.15