If those who do the teaching should have higher status in colleges, then it follows that we should have a means of paying people more money without giving them managerial jobs.

Colleges which refuse to pay lecturers the nationally agreed increment are often the ones which have crude and divisive PRP policies. This has not escaped the attention of Malcolm Wicks, the lifelong learning minister, and Paul Mackney, general secretary of lecturers’ union NATFHE.

One fairly typical scheme asks managers to mark their staff as “very good”, “satisfactory”, “needs improvement”, “poor”, and “training needed”, in 30 areas of responsibility.

Categories include “contribution to a cheerful atmosphere in college”, “loyalty”, “confidentiality”, and “flexibility”.

There is ministerial as much as union concern that this can become a tool for favouritism.

Ministers, civil servants and union officials have all muttered about how you could perhaps reward teams, not just individuals. Perhaps a “team” could consist of a whole college. But colleges putting forward pay policies to obtain their share of Mr Blunkett’s pound;50 million will need more precise guidance. They might get it by looking closely at what goes on at Derby Tertiary College, Wilmorton.

David Forrester, the civil servant helping Mr Wicks find a solution, paid a quiet visit to Wilmorton last October. NATFHE, too, has been looking closely at what is going on there, and so has the FEFC.

David Croll, the college principal, has been put on the seven-strong board of the Adult Learning Inspectorate. There are two college principals on the board. MrCroll has found the holy grail: a PRP formula which NATFHE can probably accept.

He started out with a scheme for turning the best lecturers into “learning directors” and paying them extra. Talks with NATFHE have produced a rather different scheme. Crucially, promotion to learning director is automatic unless there is a “competence dispute”.

“No one should be unable to advance to learning director,” said Mr Croll.

This disposes of the objection that PRP left people teaching in colleges who had been refused this mark of competence, marking them as second-rate teachers.

But what happens to someone who cannot get through this barrier at all? Mr Croll said: “If they lack the skill to be a good teacher, that does not mean there is no role in the organisation for them.”

The scales enable Mr Croll’s learning directors to earn salaries that match that of the marketing manager, so meeting Mr Wicks’s criticism that academics never seem to be the senior people in colleges.

For example, Mr Croll had a former mathematics teacher who worked as a manager in student services. The mathematics department needed his skills, and the man himself wanted to return to teaching, but could not afford to give up his pound;35,000 salary.

Wilmorton was able to send him back to the classroom and still protect his salary. But it was also able to pay all its staff five per cent.

Mr Croll’s deputy, Di McEvoy-Robinson, who runs the scheme, is horrified by the crudeness of some of the PRP schemes she has seen. In one college, heads of department are told to pick one teacher who “has done really well”.

But at the other end of the spectrum, she once heard a principal say that he had not given an annual increase because he could not afford to give it to everyone. “If we don’t reform pay, we will never recruit,” she said.