The Budget: Extra bonuses for returning teachers, and £200m to repair crumbling schools

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An £800m boost for school budgets, repairs and to entice former teachers back to the classroom will bolster the Prime Minister's promise to put education high on the Government's agenda.

An £800m boost for school budgets, repairs and to entice former teachers back to the classroom will bolster the Prime Minister's promise to put education high on the Government's agenda.

Part of the £200m allocated to alleviate teacher shortages will be used to award bonuses of £2000 to returnee teachers.

Ministers have introduced a series of measures, including training bursaries, to tempt new graduates into teaching. Yesterday, they announced a 19 per cent increase in applications this year.

David Blunkett, the Secretary of State for Education said: "The additional money announced in the budget for teacher recruitment will help build on that work and do more to attract returnees in particular."

Unions have pointed to the pressing need to attract teachers into the profession immediately. Returnees will receive £500 as soon as they enter the classroom and a further £1500 when they have been back in teaching for a year. Those who offer shortage subjects such as maths and science will receive £1000 and then £3000.

Mr Blunkett hopes that the package will be particularly attractive to women who left teaching to start a family. He wants headteachers to approach former teachers who are known to them. If they need retraining, the training will be paid for.

Doug McAvoy, general secretary of the National Union of Teachers, said the plan would not solve the problem: "The Chancellor's announcement is acknowledgement at last at the highest levels of the Government of the depth of the crisis hitting teacher supply. This is a schizophrenic government denying the existence of the crisis whilst seeking acclaim and votes by offering solutions.

"There are thousands of ex-teachers working elsewhere in the economy, many as media researchers, quiz show hosts and pop stars. It is unlikely that they will ask the audience or phone a friend to decide whether they should return to the classroom for a £2000 bribe."

Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, said incentives for former teachers were all very well "but far more attention should be paid to retaining and motivating those who have stayed in the classroom than by stumbling from one piecemeal measure to another."

Mr Brown has reinforced his policy of paying more money directly to schools and bypassing local education authorities. Headteachers' direct grants will rise by £10,000 for a typical secondary and £4000 for a typical primary. Direct revenue funding for secondary schools in England with between 601 and 1,200 pupils will rise to £70,000 from this April.

For primaries with between 201 and 400 pupils, it will go up to £24,000. The payments will be for three years.

The delegation of funding will be one of the main educational issues in an election campaign with Labour promising to give schools control over 90 per cent of their budgets and the Conservatives promising to scrap local education authorities and introduce "free schools".

Schools will get more money for repairing roofs, central heating and new classrooms. They will be able to use new private finance credits worth £200m for new buildings for each of the next two financial years. A typical secondary will get £9,500 extra a year to update buildings and equipment, capital for a typical primary will rise from £6,500 to £9,750. Overall, spending on school buildings will go up to £8.5bn including the New Deal for schools money that was announced last year.

Mr Brown said: "In 1997 Britain spent more on debt interest payments than all the money spent on our schools. In 2001 - 2 we will be spending £10bn a year more on schools than on debt interest."

David Hart, general secretary of the National Association of Head Teachers, said: "I am absolutely delighted that the Chancellor has upped the ante and increased the money going straight into school budgets to be spent by heads and governors as they wish. At last the Government is delivering in a key area upon which it will be judged by school leaders the run up to the general election."

Phil Willis, the Liberal Democrats' education spokesman, said the new money was "last year's leftovers and makes no real difference to education expenditure. Despite their promise in 1997, Labour has managed to spend less of the nation's wealth on education than even John Major's last government".