A joint union statement will urge the School Teachers’ Review Body to make a substantial pay award, despite a letter from the Secretary of State which hints at a figure of 2.5 per cent.

The four non-headteacher unions say the Government has ignored the need to make teachers’ pay competitive enough to attract and retain staff.

They also point out that the 4.5 increase in the education standard spending assessment (ESSA) is available to be used for pay.

In a letter to John Gardiner, chairman of the pay review body, Gillian Shephard, the Education and Employment Secretary, says the total ESSA, including specific grants, is Pounds 17.95 billion. But she warned that there are many pressing demands on this money, other than pay.

Mrs Shephard notes the projected 1.3 per cent increase in pupil numbers and the money needed for essential repairs to buildings and for information technology equipment. The Education Secretary’s letter continues: “I would therefore expect the review body’s recommendation for a pay award to be considerably less than the percentage increase in aggregate education SSAs. ”

She says that teachers’ pay has more or less kept pace with inflation since 1992 and that therefore there is no need for a catching-up award, and adds that the Government expects inflation to fall during 1996 to 2.5 per cent.

The unions rejected this, saying the increase in mortgage payments, not included in the 2.5 per cent figure, caused a 10 per cent decline in the value of teachers’ salaries.

In the letter, Mrs Shephard tells the review body to bear in mind that some schools and local authorities drew heavily on their reserves to fund the 1995 pay award.

“The review body, when making its recommendations, will need to judge the extent to which authorities and schools will be able to do this again. Indeed the review body should consider whether reserves in some schools and authorities have dropped below prudent level,” she writes.

The unions have called the ability of schools to make savings within their budgets a “mirage”.

The review body was also told that local authorities will be able to increase spending because the Government has lifted their spending caps.

Alan Parker, education secretary of the Association of Metropolitan Authorities, said the figures were misleading. “The Government has said there is an increase in the education SSA of 4.5 per cent, but the overall increase for all services is 3.3 per cent. This means councils will have to take money away from other services to allow the full amount to be spent on education. ”

David Blunkett, Labour education spokesman, also called the figures “illusory”. He said some authorities would be forced to increase their council tax to make up the shortfall because they have no recourse to reserves.

But James Pawsey, chairman of the Conservative back-bench education committee, said the money the Government has made available is enough for teachers to have an above-inflation award and for local authorities properly to fund schools.