The Teacher Training Agency has dropped plans to introduce a "crude" payment-by-results element into its 1997/98 funding system unveiled today.

But it is to press ahead with setting common price tariffs for teacher training courses, which currently attract funding ranging from Pounds 810 to Pounds 3,721 per student.

Proposals for 10 per cent of funding for initial teacher training to be withheld from institutions until their students gained teaching posts have been replaced with a new quality regime which will include monitoring student success at finding a teaching job.

Institutions will be placed in one of five quality categories, ranging from "excellent" to "unsatisfactory", according to their performance against this success rate and other measures the agency sets.

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Funding bonuses and growth incentives will be offered to teacher training providers in the top categories, and not to those in the bottom two. The agency will give institutions whose provision is judged to be excellent first priority in allocating growth in student numbers. With the Government pressing for a 50 per cent expansion in secondary teacher training intakes and 34 per cent expansion in primary over five years, this is expected to encourage improvements in quality.

Another incentive will be "expansion funds" for institutions in the top two categories to help maintain quality during growth. Institutions in the top three quality bands will also be given at least a 90 per cent guarantee of contracted numbers for three years, whereas those in the bottom category will receive only provisional places for one year until quality improves. Those in the next band up will have only a firm one-year contract.

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Stephen Hillier, TTA secretary, said the decision to build student success at finding teaching jobs into the quality system followed strong objections to the original plans, outlined in a consultation paper published last year.

"We have said we will not go ahead with the crude approach but ensure that the job success rate is one of the measures in our quality system," he said.

However, the agency's proposals to set common prices on similar kinds of teacher training provision to even out differences in funding per student across the system are likely to attract further criticism. Institutions with a lot of expensive courses will be forced to cut. The agency says it will phase in the changes and publish detailed plans for this in early May.

Other quality measures, which will be applied by the Office of Standards in Education inspections and quality audits, include how well institutions select students. This may prove a crucial factor since the TTA has also decided to fully fund institutions for numbers even when students drop out of courses. The full funding is designed to help cover training costs and discourage keeping on students who seem unlikely to make good teachers, just to avoid losing associated funding.

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