Sir Michael Bett's independent report calls for higher starting salaries to try to attract more people into university teaching, and more for the most senior academics.

The report recommends a pay structure which would give academics a minimum of £20,000 per year as a starting salary, representing an increase of more than 30% in some universities.

Without pay increases universities will struggle to recruit and retain high-calibre staff, warns the report, making it "difficult to sustain a world-class higher education system in the United Kingdom".

'Three-way deal'

But the report emphasises that its recommendations are dependent on substantial extra investment by the government.

An extra £580m would be needed to implement the recommendations, of which about £380m would be government funding. The remainder would come from a variety of sources, including research commissioned from universities.

The report says better pay is needed to retain high-calibre staff

Sir Michael said the report provided the basis of a "three-way deal" between the government, the universities and their staff, from which each would reap benefits.

"We're not trying to prescribe a strait-jacket for every university," he said.

But he added: "Something needs to be done so that the sector doesn't slide down the drain."

The report warns that meeting the costs of the recommendations from within the "sorts of funding levels presently planned by government" would "raise serious doubts about the sector's capacity to sustain the quality of teaching and research, and put plans for widening access to higher education at serious risk".

'Unequal pay'

But a source at the Department for Education has indicated that the government would take the view that the report had been commissioned by the university employers, not ministers, and it would be up to them to deal with it - within their current spending allocation.

The Bett report also warns that many universities could be taken to court by underpaid female academics.

Most would have to increase their pay budgets by between 2% and 5% to meet the requirements of equal opportunities legislation, giving equal pay for work of equal value, it says.

The report's findings have been seized upon by union leaders as evidence of how far higher education staff have lagged behind in pay compared with other public sector professionals.

Retention 'also a problem'

The Association of University Teachers, which last month staged a one-day strike in pursuit of a 10% pay rise for this year, said the report backed their claim for a substantial increase.

The union's National President, Chris Banister, said: "The government cannot bury its head in the sand over the findings of this report. If universities and colleges are to compete internationally, if the next generation of students is to continue receiving a quality education ... then it will cost money."

The campaign group Save British Science said it was disappointed that Sir Michael Bett and his team had not seen the need to reward middle-ranking academics.

"It's not just recruiting young people into research that's a problem, retaining them afterwards is also crucial," said the SBS's Peter Cotgreave. More than 50% of universities reported difficulties in retaining academic staff.

Consultation

The Bett committee was set up by the Universities and Colleges Employers' Association, whose Chair, Professor Philip Love, said: "There is much to be done.

"The report gives us the opportunity to take forward a number of issues, many of which have already been recognised within the sector and on some of which action has already been taken.

"We will be carrying forward the vital process of communication and consultation with our subscribers on an immediate basis with the aim concluding it in December."

The Chairman of the Committee of Vice-Chancellors and Principals, Martin Harris, also welcomed the report, saying "we will seek to persuade our funders that pay arrangements must not only be fair, but must be sufficient to enable us to recruit and retain staff of the highest calibre across all departments".

The report also calls for a national council of employers and unions to negotiate salaries in the future, which would "sweep away the current jumble of negotiating arrangements".

It recommends the proposed council should consider new pay structures with five grades for academic staff, and perhaps 11 for non-academic staff.

These would replace the present arrangements which involve 18 academic and 47 non-academic grades.