Anthea Millett explains the Teacher Training Agency's proposals for reform. The recent launch of a consultation paper on the future funding of initial teacher training met with a disappointing reaction from some quarters in higher education - disappointing not only because of the absence of cool reflection, in itself an anti-academic trait, but also because it suggests that fixed positions will be taken when training providers make a considered contribution to building an appropriate and lasting funding system.

It also ignores the help that many providers of initial teacher training gave to the Teacher Training Agency in preparing for the consultation, and to the Coopers and Lybrand team, whose incisive analysis of the current funding and student allocation system has been issued as part of the consultation. As the Coopers analysis makes clear, we cannot go on as we are. The system is a hybrid, with few elements designed to reflect the unique features of initial teacher training. It is time to plan for change, but to do so sensitively, recognising that any change should begin only in 1997/98 and that transitional arrangements are likely to be needed in the early years of introduction. I hope that the cool reactions on the day of publication of our paper will not prevent the evolution of a more considered response over the next two months. Four charges have been levelled at the consultation document. None of them stand up to careful scrutiny.

First, it has been suggested that the proposed pricing methodology, and the notion that there should be a link of funding to quality, are arcane. This shows a nicely droll sense of humour, as we have come to expect of Ian Kane, who I wish well in his new role as chairman of the University Council for the Education of Teachers. Any objective observer, however, will note that the current system pays between Pounds 810 and Pounds 3,721 to different providers for the same provision.

The explanation for these differences is lost in the mists of time. That is truly arcane. It is not enough to respond that courses do not really cost different amounts in practice, because "universities have massaged the figures". Continuing with such a system would be reckless and put us in breach of our statutory duty to link funding and quality. I hope that UCET will come to the table and work with us to ensure that the principle of linking funding and quality is implemented in the best possible way. Let us resolve together the serious questions that need to be addressed about the different prices that should be paid for different subjects and types of provision. Serious debate is essential when Pounds 160 million of taxpayers' money is at stake.

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The second charge is that our consultation is destabilising, and will mean that some courses and providers will go to the wall, or close simply because "the game's not worth the candle". Leaving to one side the idea that initial teacher training is a game, it is actually impossible to mount a convincing argument that different prices need put any provider out of business. Some providers are already receiving well below the average unit of funding - and are delivering high quality training on those amounts. Indeed, there is simply no correlation between the units of funding received by providers and their quality as assessed by Office of Standards in Education. There is no reason why a financially prudent institution should be unable to manage on their future grant levels. It is a key principle in our consultation document that the allocation system should afford the possibility of longer contracts to support providers' medium-term planning. This, plus the possibility of phasing in any changes, would aid, not undermine stability, especially for high-quality providers.

The third contention is that the consultation "misses the real point", which is allegedly that providers need more money overall because "school-based training is more expensive". I beg to differ - the real point is the need to use resources effectively and efficiently. The new partnership arrangements between higher education institutions and schools have certainly taken a great deal of organising and in many cases this has been done very well. Schools have also had to adapt to new responsibilities, and school-based tutors have needed to be trained.

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But all of this was aided by four years of transitional funding. I am sure that new funds could be used to good effect in the partnership context, as in many other contexts, but the economic realities for higher education suggest that the use of current resources holds the key to the future rather than increased resources.

The fourth criticism is that we are introducing the competitive ethic into initial teacher training when what is needed is collaboration. Other parts of higher education may well be surprised at this distinction. Competition for students, supported by efforts to increase quality of provision, are essential ingredients of future arrangements. That is not inconsistent with efforts at collaboration.

I can assure Ian Kane, and others within UCET, that we shall be looking at ways in which we can reward collaboration by providers in areas where that is helpful, as for example in attracting and supporting students of science and mathematics and other priority recruitment subjects. As the consultation makes clear, we are also interested in establishing a Quality Development Fund, to help high-quality providers disseminate to others what is best in their arrangements. Only the poorest providers need fear the winds of change. The arrangements on which we are consulting have been composed carefully, and we have been grateful to be able to take into account the experience and expertise of many current providers.

The task now is for all those interested in initial teacher training to contribute constructively to the development of a practical and effective system of funding and student allocations, which supports high quality provision. We owe that to the principal beneficiaries of initial teacher training - the pupils in our schools.

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Anthea Millett is chief executive of the Teacher Training Agency.