It will be up to individual universities to determine how they spend their share of the £330 million awarded for staff pay structures over the next three years, the government has confirmed.
As part of his response to the education select committee's report on student retention, education secretary David Blunkett said: "The government recognises that funding levels play a part (in staff pay and conditions) and has listened to (higher education institutions') concerns about the difficulties they experience in retaining top-quality staff because of the inflexibility of the reward system.
"When institutions apply for additional funding by submitting their individual human resource strategies (to the Higher Education Funding Council for England), it will be for institutions to determine their priorities and how these will be tackled."
Vice-chancellors had been worried that, through Hefce regulations, the government would curtail their freedom to use the money as they saw fit.
Details: www.publications.parliament.uk/pa/cm/cmeduemp.htm