It’s the basic law of supply and demand. There is a grave shortage of people to fill headships - particularly in primary schools - so the biggest slice of the salary cake has gone to fill those empty slots and to give an incentive to others to consider headship as a career prospect.

The School Teachers’ Review Body had been told by David Blunkett 18 months ago to act urgently on primary heads’ pay. Last year’s report on pay by KPMG, a management consultancy, had recommended level-ling out pupil weighting whencalculating heads’ and deputies’ pay between primary and secondary schools. This would reflect the greater workloads imposed on primary schools by local management and the national curriculum.

Heads’ salaries at present are calculated on school size and age of pupils. Primary pupils and those up to 14 count as two units, 14 to 15-year-olds as four, 15 to 16-year-olds as five, 16 to 17-year-olds are worth seven, and sixth-formers nine. The unit total for a school determines its group (see box).

There are six groups with pay boundaries which determine where on the common spine a head’s salary starts. The lowest salaries are for heads in Group One (from pound;27,204 up to pound;32,382). A mid-size comprehensive (Group Five) starts at 2,400 units and goes up to 4,600 units, paying heads between pound;41,163 and pound;52,533.

But starting in September, the emphasis for calculating pay switches from pupils’ age to the key stage they are studying. Weightings have also been changed to increase primary heads’ pay, particularly in smaller schools with little differential between their salaries and those of classroom teachers.

Under the new system, infant and junior school pupils (key stages 1 and 2) count as seven units; KS3 pupils (11-14) score nine; and those studying GCSE (KS4) count for 11. The inflation of the pupil scores means there is still some differential between primary and secondary, but there has been a greater levelling-out.

These changes were proposed by KPMG last year, but its final recommendation -that sixth-formers score 11, the same as KS4 pupils - was not accepted.

Under pressure from the Secondary Heads Association and others, the review body decided to keep a differential here and score KS5 students as 13. But 13 compared with nine for an infant pupil is a lower comparative ratio than the existing nine to two score - which means a boost for the smaller school groupings.

However, from September there will be eight school groupings instead of six which means that some schools will be changing their classification. In theory this should benefit large secondaries and some large primaries. It is also intended to provide incentives for career heads to move on to bigger, more challenging posts.

The other important change is that the review body says from now on heads’ salary progression must be linked to performance, both for themselves and their schools. “There must be no suggestion of automatic payments,” the review body says. Since 1996, governors have had to agree targets at the outset of the school year and review heads’ performance at the end. These reviews are now to be more strictly observed and their operation examined during inspections.

Governing bodies are encouraged to be flexible. For new heads they should determine a starting salary and six further promotion pay points. They should be prepared to award increases annually in the first three years, depending on a head’s performance, or give more than one point in exceptional circumstances.

In cases of “extreme environmental challenge”, as the review body puts it, they should be prepared to pay over the odds. But such decisions would need to be ratified externally.

The controversial decision was one of omission: the failure to do anything about deputies’ pay. These are the people from whom future heads will be drawn. Last July, the review body recommended that governors should be allowed to pay senior members of school management teams at heads’ and deputies’ level if they thought it appropriate.

KPMG had said there was too much variation between schools to put deputies and senior staff on to the pupil weighting system and said more work needed to be done to create a proper assessment structure. Then came last December’s Green Paper, which introduced the idea of a leadership group that will create a new pay scale for deputies and senior staff when it is comes into operation in September 2000. In the meantime they continue on the old scales and group sizes.

But by next year the critical situation - too few headship candidates - might have worsened.