No, I'm absolutely not suggesting that there should be a revolving door of staff when they get too expensive. However, cost-saving and income-generating measures do need to be looked at.
A £1.1m wage bill for only teachers would be expected for, based on average wages, a 5 form intake primary. That would be a huge school for the primary level and would benefit from other economies of scale (headteacher/admin costing less per pupil or an increased impact of per pupil funding increases, etc). They are also hit gentler for the underfunding. For example, a 5 form entry primary would have an annual budget, based on per pupil funding, of nearly £5m. I'm saying this because I'd be concerned that a school like that justifying laying off support staff by citing the teacher pay increase would be being disingenuous.
If your school is smaller than that, with lower funding, but still with the same level of costs then you do have to question how the budget is being spent/managed, not least because, based on what you've said, the year before this one, the budget was only breaking even.
I'm sorry to labour this point but I'm very wary of the wage rise being used as an excuse, as I'm seeing it being used across a number of schools/trusts and in the public discourse. When you actually do the calculations, it alone can not be responsible for the extensive laying off of support staff.