David Blunkett has responded to the recruitment crisis with a pound;600 million pay deal targeted at the newest teachers.

The profession will get at least 3.7 per cent, after Mr Blunkett accepted the recommendations of the School Teachers’ Review Body, which advises ministers on teachers’ pay and conditions.

The deal will see the pay of newly-qualified teachers rise by 5.9 per cent from pound;16,050 to pound;17,001 from April 1. The rate of increase has been staggered up the pay scale to prevent “bunching”.

Staff with one year of experience will get 5.7 per cent, taking their pay to pound;17,892, while someone half-way up the pay scale (point 5) will receive pound;19,821, an increase of 4.8 per cent.

Announcing the pay settlement last Friday, Mr Blunkett said: “Of course we need to recruit more teachers and to provide backing to those schools or education authorities where high house prices make recruitment more difficult.

“But this is a generous settlement and combined with the changes we made last year, it starts to make teaching a genuinely attractive profession.

“I hope that this settlement will reinforce the wider improvements already being effected in working conditions and in standards for the coming year.”

Concerns over teacher shortages are a recurring theme of the review body’s report - its 10th. Evidence from individuals and organisations suggested that concerns about teacher recruitment and its impact on standards had “sharply increased”. But starting salaries and the need to draw more graduates into teaching are a particular problem, it says.

Surveys of graduate salaries showed that better-qualified graduates could expect anything from pound;14,000 to well over pound;20,000 from major employers in 2000. The median graduate starting salary was pound;18,000, a rise of 2.9 per cent on 1999.

The report says: “It remains vital that underlying pay levels are sufficient to recruit, retain and motivate all the teachers needed to achieve the challenging targets for improvement. We have a particular concern on this occasion about the starting rate for new teachers, despite the scope which exists to enhance the minimum salaries which are payable.”

The problems of London schools are also highlighted. The report recommends substantial increases to London allowances but also calls on ministers to take measures to address the problem of the capital’s housing costs.

The report says: “The particular recruitment and retention problems for schools in London are also widely acknowledged. We have made our view clear that full use should be made of the new recruitment and retention allowances to address specific problems - not all scools share the same degree of difficulty in attracting and retaining staff.”

In response it recommends a rise of 30 per cent, taking the inner-London allowance from pound;2,316 to pound;3,000; outer-London from pound;1,524 to pound;1,974 and the “fringe area” from pound;591 to pound;765.

The teacher unions had told the body they were concerned about the London situation. Employers argued against an above-inflation rise, saying it would damage local authorities’ ability to raise standards, but even they accepted that the allowances were inadequate.

For the first time schools now have discretion to offer recruitment and retention payments of up to pound;5,000 a year per teacher. This aims to tackle recruitment difficulties, particularly in high cost areas such as the South-east.

The pay reforms introduced in September 2000 have allowed schools to pay a recruitment and retention allowance of up to pound;3,765 to classroom teachers. The new pay package cuts the red tape which restricted the number of schools that could use the retention allowances. At present only failing inner-London schools are allowed to award the maximum pound;3,765.

There are currently four levels of allowance. The report introduces a fifth worth pound;5,085. It also gives heads the freedom to offer “golden handcuffs” deals to retain staff.

Heads will be able to carry forward recruitment and retention allowances for up to three years and then reward staff who remain in challenging jobs for this time with a bonus of up to pound;15,000.

Mr Blunkett also announced a pound;5m extension to the London scheme to help people return to teaching. The Teacher Training Agency-run scheme allows qualified teachers to refresh their skills before rejoining the classroom.

In London, those returning to Excellence in Cities areas not only attend the courses for free, they also receive a pound;150-a-week grant during the course and are paid a bonus if they get a job in the area.

The new money will extend the scheme to other areas facing teacher shortages. Supplementary childcare grants will also be paid to returners attending the courses.

REVIEW BODY RECOMMENDS

April 1, 2001:

* pay for classroom teachers should go up by at least 3.7 per cent;

* larger increases at the lower end of the main scale to establish a minimum starting salary for an entrant with a good honours degree of pound;17,001;

* management, recruitment, retention and special needs allowances should be increased by 3.7 per cent;

* new recruitment and retention allowance should be created of up to pound;5,085;

* the values of the pay spines for advanced skills teachers and for heads, deputies and assistant heads should be increased by 3.7 per cent;

* teachers’ London area allowances should be increased to: inner-London pound;3,000; outer-London pound;1,974; and fringe pound;765.