There are ongoing concerns about changes to management allowances
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Teachers and head teachers in England and Wales are to get a 2.5% pay rise in each of the next two years - above the expected inflation rate.
The recommendations of the independent review body have been accepted by the Education Secretary, Ruth Kelly.
She said the Bank of England expected inflation to be about 2%, but she accepted concerns about the need to ensure a continuing supply of teachers.
The National Union of Teachers said the rise amounted to "a standstill award".
Labour market position
The School Teachers' Review Body recommended an increase of 2.5% from September 2006 and again from September 2007 on pay for school leaders, teachers and Advanced Skills Teachers, with slightly more for certain groups.
The STRB also said that if the average rate of headline inflation fell below 1.75% or above 3.25%, the government, local authority employers or unions could ask for a review.
In response, Ruth Kelly said an award of 2.5% "could not be considered acceptable" on the basis of anticipated inflation.
"However, it is clear from the report that the STRB has given close consideration to a range of evidence relating to the overall labour market position of teachers", she said.
In particular, "the need to ensure a continuing supply of high quality teachers, consolidating the improvements made in recruiting and retaining good teachers at a time of change, and some emerging evidence of recruitment and retention issues in relation to specific groups of teachers".
So she proposed to accept the recommendations.
As usual, there is a formal period of consultation, which runs until 10 January.
'Standstill'
National Union of Teachers general secretary Steve Sinnott said: "This is a standstill award.
"Teachers' pay next September when this rise is implemented will be no better than it is today. Hard work and commitment are not recognised in this imposed settlement."
There was still a struggle to recruit and retain sufficient teachers despite the government's "golden handshakes" and other measures.
"They are not working and this standstill award in teachers' pay will not change that," he said.
"Teachers are graduates. The pay levels available to graduates elsewhere in the economy far outstrip those available in teaching.
"This award gives no recognition to this fact nor to the hard work and dedication of teachers in schools throughout England and Wales."
Head teachers' unions accepted the findings.
The leader of the Secondary Heads Association, John Dunford, said 2.5% was much as expected.
"School leaders will be relieved that the rumours of a 2% rise were unfounded," he said.