The Government is to drop the mechanism by which a percentage of the grant to further education colleges was withheld to ensure the introduction of new flexible contracts of employment.
Education minister James Paice told college employers this week that the 2 per cent holdback was to be suspended for the 1996 pay review in recognition of excellent efficiency gains.
But he warned that while the decision demonstrated the Government's confidence that colleges would have no wish to return to restrictive practices, the sector's future would be threatened and holdback could be reintroduced in future years if they did so.
The Colleges Employers Forum, which lobbied the Government to abandon the holdback, said the move was a big step forward in developing the freedom of corporations to determine their own policies. "The sector is now mature enough to manage its own affairs without undue outside regulation and this is a credit to the sector's efficiency gains," said Roger Ward, chief executive.
Mr Paice said it was the Government's policy that public sector pay should be linked increasingly to individual performance. "In that context I understand why colleges have decided to refuse to award pay rises to staff whose productivity is hampered by remaining on Silver Book conditions," he said.
The minister also praised the growing use of agency lecturers for part-time work in colleges.
The CEF is to tell college authorities that three broad criteria will apply to pay rises for the 1996/97 pay round. First, any increases are to be funded by improvements in efficiency or productivity. Second, pay increases should reflect the needs of staff recruitment, retention and motivation without any automatic entitlement to annual increases. Finally, any increases must be affordable.