With record levels of cash available for salaries this year, many colleges have given one-off payments of up to pound;1,000, across the board, in addition to the 3.5 per cent national pay settlement.

But, from next year, colleges will be rewarded for excellence at the discretion of the 47 local learning and skills councils. The poorest-performing colleges will get the rate of inflation. Better performers will get at least 2.5 per cent extra.

Principals argue the funding under this regime is too tight for them to pay across-the-board bonuses.

Within three years, each college will be rewarded in line with four targets: student enrolments, involving employers, pass rates and teacher qualifications. But concern was expressed at the Association for College Management annual conference in Manchester this week that this will undermine efforts to reward teamwork.

South Downs College, Hampshire, gave all staff an extra one-off pound;1,000 this year, while Croydon College, south London, awarded all staff an extra pound;500 bonus.

Mariane Cavalli, Croydon principal, said: “If the private sector meets or exceeds its sales targets, it rewards all staff the same. To do otherwise would be divisive.”

Terry Knight, vice-principal of North West Kent College, said: “If you are trying to build up teamwork in a college, you have to reflect that in the pay awards.”

He used teacher pay initiative money for support staff as well as lecturers. Most colleges have responded similarly. Many at the conference said they wanted to adopt the “WH Smith and John Lewis partnership philosophy” of giving everyone the same bonus for institutional success.

Many warned that the best staff would move to colleges with the best rewards, undermining the efforts of poorer-performing colleges. Reward schemes would favour senior managers and support staff would lose out, they said.

South Downs handout, 37