Schools should receive cash incentives if parents and pupils rate them highly in “user satisfaction surveys” and they raise disadvantaged pupils’

achievement, a prime ministerial policy review said this week.

The recommendations go beyond existing plans to set individual pupil progress targets and reward schools that achieve them. They propose to measure consumer satisfaction and use it as “an explicit component of the reward system”.

Schools with good value-added scores for disadvantaged pupils would receive more cash.

Downing Street said payment-by-results would have to go hand in hand with a wider revamp of school funding. The review set the scene for Wednesday’s Budget, in which Gordon Brown sought to assure teachers and parents that education remained a priority.

In Leicestershire, the Chancellor’s assurances were welcomed by the head of a high school whose attempts to pioneer personalised learning have been threatened by local authority attempts to claw back the pound;274,000 it has set aside.

Steve Coneron, head of the 400-pupil Limehurst high school in Loughborough, hoped the policy review signalled a move away from Department for Education and Skills funding methods.

“If it’s rewarding schools for the success, achievement and progress of their pupils, I think that’s to be applauded,” he said. “Though we’ve been fortunate in having access to greater funds, which allow flexibility, I do think schools should be allowed to manage their budgets in ways which they consider to be appropriate.”

At the opposite end of the spectrum is Hengrove community arts college in Bristol, which has been forced to lay off 12 staff as it battles declining rolls and a pound;260,000 deficit.

Just out of special measures, Hengrove had been improving its value-added results when it had to cancel geography and PE GCSEs and its performing arts Btec in a cost-efficiency drive last month. More than 40 pupils have been affected.

Stephen Murtagh, the headteacher, said schools needed time, money and training -not target-based rewards and penalties - to implement personalised learning.

“We’re not going to revolutionise education by linking targets to money.

That’s already been proved to be unreliable,” he said. “If you’re just chasing finance, then schools and heads will lose integrity.”

At the policy review, launched, significantly, at Mossbourne academy in Hackney, east London, Mr Brown said: “People want goods and services tailored to their needs. This is the lesson for the future of public services: that every parent’s aspirations are heard; that every patient’s needs are understood; and every child’s talents are realised. I would see us at the foothills of major educational advance in this country.”

A pilot in 10 local authorities would pay bonuses to schools delivering good results, he said. Every six-year-old who was falling behind would be given personal tuition to ensure they caught up by the time they reached secondary school.

Matthew Taylor, Tony Blair’s former head of policy, writes in The TES today that the policy blueprint has Treasury fingerprints all over it. “The proposal that school funding should reward value-adding and so encourage schools to attract pupils with the greatest scope for improvement could have a major impact,” he writes.

Other commentators said the event signalled a rapprochement between the two men, with Mr Brown endorsing public sector reform.

Alan Johnson, the Education Secretary, announced the 10 authorities where the carrot-and-stick approach would be piloted from September: Liverpool, Calderdale, Solihull, Leicestershire, Essex, Westminster, Bexley, South Tyneside, Gloucestershire and East Sussex.

Teachers’ unions are united in their opposition. The Association of Teachers and Lecturers described it as “just silly”, while the NASUWT warned against a “disaffected and vociferous” minority of parents dictating funding.

Matthew Taylor, page 26

REVIEW KEY POINTS

Funding rewards for:

Good satisfaction survey results.

Achieving individual pupil progress targets.

Delivering better outcomes for disadvantaged pupils.

Involve the private sector by:

Allowing more organisations to run schools or provide services.

Enabling high-performing schools to bid to take over failing schools.

Personalise learning by:

Having smaller tuition groups in maths and English for the first year of primary and secondary, and giving children in deprived areas credits for catch-up classes.

Expanding the National Academy for Gifted and Talented Youth.

Develop staff by:

Encouraging ministers and civil servants to shadow teachers.

Developing teaching assistants.

Involve parents by:

Encouraging local authorities to provide detailed information about admissions and allowing parents to provide feedback about schools.

Providing parenting classes.