Staff in more than 7,000 schools in England are about to discover that they are getting cash bonuses for having helped pupils to do well.

Many of them also had the money last year when the awards were made for the first time: 42% of the winners have had the bonuses twice.

The school achievement awards typically pay up to �25,000 for secondary schools and �5,500 for primaries - minus 12% employers' national insurance contributions.

The amounts people get are subject to tax and national insurance - so instead of rewarding staff that much goes back to the Chancellor of the Exchequer, Gordon Brown.

Teachers' unions say it is a demotivating lottery, arbitrarily allocating more than �60m which could be better spent on other things.

In the first round last year a mistake by officials at the Department for Education meant that about 300 primary schools got awards they should not have had. They were allowed to keep the money.

In this year's round, the criteria for the awards were:

• pupil performance in 2001 was substantially better than in 1998
• performance in 2001 was better than most schools in similar circumstances
• recovery from failure - coming out of "special measures" in the 2000/01 school year.

The department said that almost 7,100 schools would benefit - about three quarters of them for rapid improvement.

The Prime Minister, Tony Blair, was visiting one of the award winners, Abraham Moss School in Manchester.

"Without the hard work and dedication of teachers and support staff we would not be seeing the improved standards we have today," he said.

The Minister for Lifelong Learning, Ivan Lewis, said the money was intended to reward the entire school community - teachers, teaching assistants, administrative staff and catering teams for their hard work in helping raise standards.

"Pupils, parents and staff deserve to be proud of their school's success."

'Arbitrary'

But the Secondary Heads Association said the scheme was "education's equivalent of the National Lottery".

"It provides pay bonuses for staff in one third of all schools, but the methods by which the schools are chosen are arbitrary and unrelated to their effectiveness," said the association's president, Tony Neal, an expert on school performance data.

He said schools whose pupils had improved significantly from a low base - known as "adding value" - but did not get award, felt cheated.

"Schools that do receive an award feel embarrassed, because it has no credibility. The whole exercise is demotivating," he said.

"The cost of this charade is more than �60m, taken from education funding at a time when many schools are facing real-term cuts in their budgets in 2002-03.

"The government should respond to the universal condemnation of this silly scheme and stop wasting funds which are urgently needed for the education of young people."