ANALYSIS By Mike Baker

Could disputes over pay leave classrooms empty?

They are caught between a desperate desire to dampen down public sector pay and real concern that the unions may be ready for a fight over salaries.

Pay is also likely to be pretty high on most teachers' lists of concerns, with the retail price index at over 4%, no further cut in interest rates this month, and big rises in domestic fuel bills already announced.

Could 2008 be the year when industrial unrest returns to schools?

The prime minister has already shown his hand on public sector pay: he wants increases kept below 2% in order to bear down on inflation.

The police are to get just 1.9%, despite the independent arbitration panel recommending 2.5%. Nurses are also being restricted to 1.9%.

Bad omens

The prime minister also wants to put the public sector onto three-year pay deals.

Teachers in England and Wales, of course, are already on a multi-year deal.

But the current deal comes to an end this year.

Could 2008 be the year when the whole structure of long-term deals and the School Teachers Pay Review Body - which advises the government - comes to an end?

The omens are not good. Last April, at the teacher unions' annual conferences, there was a determined mood over pay.

It was the first time for many years that salary issues had dominated all other concerns.

Indeed, the National Union of Teachers' conference unanimously backed a motion ordering preparations for a one-day walkout in schools as the "first stage" in a campaign against a pay squeeze.

This will be a crucial year for the review body

Of course, we have become quite used to sabre-rattling at the NUT conference over many years.

But this time there does seem to be a determination amongst teachers in all unions, not only among their more militant members, to resist a below-inflation pay rise.

The current teachers' pay deal was announced in December 2005, when inflation was thought to be under control.

It offered 2.5% in September 2006 and a further 2.5% in September 2007.

The next deal is due to cover the period from September 2008 to August 2011 and ministers have told the review body to recommend a deal within the 2% inflation target.

Teachers' leaders say that effectively means a pay cut.

So two big questions arise.

First, will the Pay Review Body recommend an increase in excess of 2%?

And, if it does, will ministers refuse to implement the increase in full?

'Fared well'

If the review body does go below 2%, the government will be able to hide behind its recommendation.

The unions will accuse the review body of being intimidated by ministers.

But it is just possible that widespread industrial unrest might be avoided.

If, however, the review body says teachers should get more than 2% and the government overrules that, then industrial action seems much more likely.

As it is, the unions are angry that a clause in the last pay deal, which allowed extra increases if the RPI went above 3.5%, was not triggered even though the retail price index rose to well above that last year.

This will be a crucial year for the review body. It was set up in the late 1990s, following years of industrial action that affected schools (although the last national strike was back in the late 1980s).

During this period teachers' pay has fared pretty well compared to other sectors.

How far?

Between 1997 and 2005, teachers' pay increased by around 40% in cash terms and 15% after taking inflation into account.

Moreover, latest evidence suggests that the number of hours worked by teachers, while still high, has fallen.

Nor is there much sign that pay levels are yet seriously affecting either recruitment or retention.

The latest official teacher vacancy rate is just 0.6%, well down from 1.4% in 2001.

Teacher shortages remain in certain key subjects and areas, but are not a problem across the board.

A 2007 report for the government on teacher status found that 20% of respondents thought pay levels were a positive attraction into teaching, while just 12% thought they were a deterrent.

So, despite the genuine anger over pay, there must be some doubt how far the unions will be willing to push it just now.

But a below-inflation award, after two years in which pay has started to fall behind prices, would certainly end their confidence in the School Teachers Review Body and could just spell disruption in schools.

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