A TOPSY-turvy system of incentives means universities face bigger penalties for recruiting too many new trainee teachers than for undershooting their targets.

Universities which over-recruit postgraduate secondary students could end up footing the bill for their pound;6,000 training bursaries. But if they under-recruit, grants averaging pound;3,673 per trainee may be held back.

Penalties for over-recruiting in primary are even steeper with universities facing a reduction in student numbers (pound;3,673) the following year AND paying the bursary (pound;6,000) for postgraduates - nearly pound;10,000 per trainee. The move by the Teacher Training Agency was described as perverse by headteachers desperate for staff.

John Dunford, general secretary of the Secondary Heads’ Association, said:

“Unless the Government has sensible funding policies, universities are forced into a position where they are likely to work against the interests of wider Government policy.”

The TTA said the additional primary penalties reflect consistent over-recruitment. It says it would be unfair for providers that have met targets to lose places the following year because others had over-recruited. It does not penalise universities for exceeding targets for secondary - although they may have to pay for bursaries.

So far, no university has had to fork out for the bursaries because the agency has reallocated funding from under-recruited courses. But Mary Russell, secretary of the Universities Council for the Education of Teachers, said providers had been warned there might be less flexibility this year.

A TTA spokesman said that so far it had been able to meet all bursary commitments, but added: “Should a provider choose to over-recruit without securing our agreement, it runs the risk that the TTA may have insufficient funds to pay for the additional bursaries. To date this has not happened, but it is a situation that could arise if providers failed to act responsibly.”

The head of a university education department told The TES: “This year the TTA have said the university is liable to pay the bursary of people we recruit over target. So we lose the TTA grant and the training salary. It costs us around pound;10,000 for each over-recruited place.

“If we under-recruit, we lose only the pound;3,500 grant. We would rather under-recruit than over-recruit. But I feel it would be pretty difficult to penalise those who over-recruit, given the current climate.”

* The number of people who started teacher training courses this autumn is at its highest level for seven years, according to official figures disclosed yesterday.

Almost 29,000 trainees have started postgraduate or undergraduate courses - up 1,250 on last year. A further 1,290 have joined the school-based graduate teacher programme.

Secondary recruitment is up 9 per cent, and all the shortage subjects have seen increases in numbers, except English. But only three subjects (English and drama, history, and physical education) have hit or exceeded Government targets.

The number of trainees on primary courses was down 1 per cent - but targets were still met.