The Teacher Training Agency's first annual funding allocations reveal a move towards converging the cost of courses based at schools and higher education institutions.

School-centred schemes will receive a boost in funding of up to Pounds 800 per student to match the average levels for PGCE courses at higher education institutions.

The more expensive centres, mainly higher education institutions, face cuts of up to 4 per cent, averaging out at 1.5 per cent across all providers.

Total funding for the 1995/96 academic year is Pounds 165 million for 60,000 students in total.

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An extra 800 secondary initial teacher training places have been created, mostly in mathematics, English, science and modern languages. Primary teacher intake targets have been cut by 7 per cent, or 800 places, to 12,000.

In line with its statutory mission, the TTA has awarded funding for the new secondary places based on a qualitative assessment of bids received and says next year's primary reductions will involve quality considerations.

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"It is the first time a funding agency has linked funding to quality of provision," said TTA chief executive Anthea Millett.

She said evidence from Ofsted and HMI reports was used as well as cost to award the growth bids. All the other places were decided on the basis of HEFCE methodology.

She said: "We do not have sufficient quality information to employ quality assessment for primary at the moment. We will consult during the course of the year on how we do that."

Miss Millett said the TTA's longer term aim is to consult widely on a new funding methodology which promotes quality, cost-effectiveness and diversity.

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She added: "What we are ultimately trying to do is put funding on a rational basis although I do not think subjects would ever cost exactly the same to deliver."

A cash "buffer" has been given to 14 institutions facing losses of more than 4 per cent this year. The highest buffer pay-out, Pounds 96,121, is to the University of Wolverhampton, which has a Pounds 268,306 cut to leave a Pounds 2.65 million budget.