Ministers are planning to give premium payments to London's teacher training providers after they warned they may no longer be able to educate the next generation of teachers without more money.
Two months after the Institute of Education, London's biggest teacher educator, was handed a £3 million rescue package to prevent it from dropping its initial teacher training courses, the Teacher Training Agency launched a consultation on plans to boost funding for all the capital's providers by about £300 per student.
The TTA has mooted an 8 per cent inner-London premium, but has warned that higher payments could mean providers outside the capital losing funding.
The consultation document says that feedback from London providers and its own research shows that "in the medium to longer term, funding for London providers will be insufficient to guarantee the supply of sufficient good-quality training places in the capital".
Universities have complained that too much money is passed to schools for mentoring and assessment and that salaries are too low to recruit good lecturers, who can earn more in schools.
"A number of London providers, most publicly the Institute of Education, have already been considering whether they can afford to continue in initial teacher training," the TTA says.
The agency says that London can ill-afford to lose training places, as it "suffers more acutely than other regions from the loss of young teachers to other occupations", and has serious teacher shortages.
London has 14 per cent of all teachers but 30 per cent of all teaching vacancies.
The TTA paid £180 million to train 49,600 full-time equivalent ITT students in 2002-03, an average of £3,634 per trainee. It says it will cost about £2 million a year to give inner-London providers an 8 per cent premium, with a 5 per cent premium for outer-London universities. This is based on the approach by the premiums given for mainstream undergraduate teaching by the Higher Education Funding Council for England.
A more complex model based on the local authority standard spending assessments would give London's institutions more money, but would require an additional £8 million. The TTA said it "could only be implemented at some cost to that part of the ITT sector that was ineligible to receive a premium".
The Universities Council for the Education of Teachers said it was pleased that the TTA had acknowledged the serious problems in London, but warned that there was a national problem of underfunding.