IT is a ritual which speaks volumes about the state of teaching in the early 21st century. In every school across the country, a senior teacher sits down daily with a telephone and a list of teacherless classrooms. He or she must then ring around private teacher supply agencies to ensure each class is covered.

But while schools find the task of putting adults in front of pupils increasingly fraught, the outlook for the agencies has never been so rosy. Fifteen years ago, there was no such thing as a private teacher supply agency in this country. When TimePlan, the first, opened its doors in 1989 there was an outcry. But, despite resistance from unions anxious about privatisation, the London-based company thrived. Although it was recently criticised for placing a young Canadian, Amy Gehring, in a secondary school despite suspicions she had had sexual relations with pupils, the company has won the confidence of many schools.

In 1993, a recruitment agency boss called Bob Wicks started Select Education Supply in Hertfordshire, and the privatisation of teacher supply began to grow outside the capital.

Now there are believed to be more than 100 agencies operating across the UK, from multi-million pound international enterprises to one-man operations based in front rooms. At least six out of 10 days of teacher supply cover are provided not by local authorities but by these companies. It is believed that as many as 40,000 teachers - a tenth of the workforce - are working casually in England, 24,000 of them through commercial agencies. The vast majority of schools now use agencies rather than relying solely on local authority supply pools.

This does not mean they are happy with the arrangement. Though they are reasonably satisfied with most teachers sent by agencies, they believe tighter regulations are needed to stop staff like Miss Gehring slipping through.

Almost every school can tell of a wonderful supply teacher who was offered a permanent job. But almost every one has a horror story, too. Roger Broadbent, a National Union of Teachers divisional secretary in the West Midlands, says one supply teacher drafted into a struggling school during an Office for Standards in Education inspection could not spell simple words and did not know which local authority the school was in. When she was asked where she had qualified, she named a non-existent course. She was asked to leave, but later wrote an anonymous letter accusing two other teachers of a serious assault on a pupil. The allegation was never proven, but the two teachers were suspended during an investigation. One had a nervous breakdown and has now left teaching.

In another case, a science teacher recruited abroad by an agency risked injuring pupils by pouring water on to phosphorus in class. He lacked the chemical knowledge to appreciate how dangerous his action was, Mr Broadbent believes.

“We have heard Estelle Morris saying there are sufficient regulations in place, but some agencies are driving a horse and cart through them,” Mr Broadbent says.

Although a Department for Education and Skills circular sets out a list of checks agencies must make on staff, it is still possible for incompetent or lazy teachers to slip through the net. In theory, a teacher who is dismissed or who resigns rather than facing dismissal should not be able to work for a supply agency. In practice, it is possible. Although agencies are supposed to make the checks, and can be prosecuted for not doing so, the DTI inspectorate which oversees employment agencies usually only makes checks if it receives a complaint. No teacher supply agency has been sanctioned in the last year for breaching the rules.

However, schools’ main complaint is not incompetent supply teachers but cost. For many, the daily ring-around is tinged with desperation. As teacher shortages bite harder and agencies respond by pushing their rates up, schools feel increasingly ripped off.

Tim Benson is headteacher of Nelson primary in Newham, east London, one of the biggest in the country with 865 pupils. A quarter of his 32 teachers are agency staff - double the number he needed four years ago.

“Eighteen months ago I paid pound;130 a day for supply cover. A year ago it went up to pound;165 and now it’s pound;185,” he says. “We have found the agencies reliable. Indeed, they’ve given us some good-quality teachers. They’ve got us over a barrel. If you look at the percentage increase, it’s phenomenal.”

Mr Benson uses TimePlan and Select Education Services, two of the bigger agencies, but others have also put up their fees in response to teacher shortages. Schools pay around pound;160 per day for supply cover, on average, the temporary teacher usually gets about pound;50 less.

This pound;50 fee allows agencies to make a healthy living, and most record gross profits of about a quarter of their turnover. However, with one notable exception - TimePlan, whose three directors took home pay packages worth pound;1.8 million in the year to July 2000 - few pay shareholders fantastic sums.

Christopher Elliot-Newman, personnel manager for First Call Education Services, a small agency supplying between 600 and 700 teacher days each week, says it has many hidden costs. His agency aims to charge schools 30 per cent more than it pays teachers, he says, but only about 5 per cent of that is profit. The agency must add National Insurance of 12 per cent to the teacher’s pay, and it must recruit an increasing proportion of its list from abroad, sending costs shooting up. It must pay teachers within a week, but can wait up to six months to receive its money from a school.

Bob Wicks, chief executive of Select Education and chairman of the education division of the Recruitment and Employment Federation, backs his argument. “All this talk about fees really makes me cross,” he says. “People think there are huge profits being made but they don’t see the investment we have to make, daily and weekly, to attract teachers to our register. It doesn’t happen by accident. If we make a profit we do it because we are efficient, not because we are overcharging.”

However, many commentators remain unconvinced. John Dunford, general secretary of the Secondary Heads Association, believes schools could have been spared much of their current financial pain if local authorities had reacted more swiftly to the teacher recruitment crisis by beefing up their supply pools. And he fears there will be more complaints about the quality of the teachers supplied by agencies if the market is not adequately regulated.

“Any market that expands this quickly soon gets out of control,” Mr Dunford says. “On the supply agencies’ books are some marvellous teachers. There are also some who resigned from their jobs because they were on the point of being dismissed for incompetence.

“Five years ago the word used to go round when that happened, but now there are just too many supply teachers for schools to do that.”

A Department for Education and Skills “kitemark” scheme for supply agencies, originally due to be launched last autumn, is still under discussion. In response to concerns about costs and quality, some local authorities are reinstating supply pools or are contracting a single agency to provide cover. Select Education is about to sign a deal with Essex under which schools will pay their supply teachers to scale and will give the agency a flat-rate pound;15 fee.

None of these measures is likely to affect the free market which has developed in teacher supply, though. One study has even estimated that on current trends, half the teaching force could be agency staff within eight years. Increasingly, supply teachers are negotiating their pay upwards - and putting additional pressure on schools.

At Nelson primary, Tim Benson is coming to terms with spiralling staffing costs. “My average teacher’s salary for a home-grown teacher is pound;29,000. The annual cost of a supply teacher is pound;37,000. That’s pound;8,000 extra, and I have eight supply teachers so the extra cost for this school is pound;64,000 a year,” he says. “The agencies tell us they now have to recruit harder, but I think they are also taking advantage of a difficult situation.”

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CHECKLIST FOR SCHOOLS

THE Department for Education and Skills’ Circular 796 details the checks agencies must run on supplyteachers.

lIdentity from a passport or birth certificate.

* Permits to work in this country. If the teacher is a foreign national, the agency must see the relevant work permit.

* Previous jobs and references.

* List 99 - the secret register of people barred from working with children. It is unlawful to employ anyone on the list.

* Criminal records. From next month agencies should obtain a certificate from the new Criminal Records Bureau.

* Teacher’s notification of Qualified Teacher Status, or proof of overseas qualifications.

* The employer must inform the DFES if a teacher is dismissed or resigns in circumstances where he or she should have been dismissed.