A three-year deal for teachers will reinforce the message that extra pay depends upon reform of the teaching profession.

Teachers' pay reform

'Improved incentives for excellence' Linking pay rises to performance One-off bonuses possible Extra pay for inner London Targeting increases at maths and science Extra incentives for heads and senior staff

A letter from the Education Secretary Estelle Morris to the teachers' pay review body calls for a more flexible pay system with incentives for raising standards.

This will include targeting pay to tackle specific recruitment problems, in subjects such as maths and science and in areas such as inner London.

But the leader of the National Union of Teachers, Doug McAvoy, has rejected the proposals as "half-baked".

Modernising

And the National Association of Head Teachers says it is "dismayed" by the proposals, which could spark a "rash of industrial disputes at school level".

The education secretary has made a priority of "modernising" the teaching profession - and says that the pay structure must reflect this.

Half-baked performance pay will not attract people into teaching or persuade teachers to stay

Doug McAvoy, National Union of Teachers

Pay should promote "the need for improved incentives for excellence" and "a stronger culture of professional improvement", writes the education secretary.

And it raises the prospect of one-off bonuses and other financial rewards for success, in a pay deal which would apply from 2003 to 2006.

Teachers are already offered a higher rate of pay if they successfully cross a performance "threshold".

'Challenging'

But extra pay above this threshold could depend on fulfilling tougher performance targets - with Ms Morris calling for pay to be linked to a "progressively more challenging" structure.

The education secretary also raises the longer-term possibility that "movement up the main pay scale for teachers should be performance-related".

Performance pay was fiercely attacked by the teachers' unions when it was introduced.

And Doug McAvoy says that "the imposition of further half-baked performance pay measures and a new range of local discretions will not attract people into teaching or persuade teachers to stay".

"The Secretary of State is woefully misinformed if she thinks that local flexibility and requirements for new teachers to jump further hurdles in their early years of teaching are going to motivate and retain them."

"Unless teachers' pay is brought up to fair and competitive levels with other graduates the current severe problems of recruitment and retention will continue."

Capital problems

Ms Morris's letter also suggests a more localised approach to recruitment problems - raising the prospect of a more complex system than the current London weighting.

"Blanket increases in London allowances will not help with the particular need some schools have to retain their best teachers more effectively," says the education secretary.

The education secretary's letter also calls for extra pay to reward the "chief executive" head teachers who will lead federations of schools.

And it proposes extra rewards for heads and heads of department who are responsible for "transformational leadership".

But heads have not welcomed the package of proposals.

"Radical changes to a performance related pay system, that is still in its infancy, will be greeted with dismay by head teachers, unless the government addresses their concerns about the current system such as inadequate funding," said David Hart of the National Association of Head Teachers.

Teachers have received a 3.5% increase this year - and the switch to a three-year deal is intended to produce a more long-term, stable structure for salaries.

Teachers' starting salaries, without London weighting, are �17,628, rising to �25,746, before reaching the higher "threshold" pay levels.

The pay review body will be expected to respond to the proposals by January 2003.