Teachers receive £100,000 loans to buy a family home

Senior teachers are to receive loans of up to £100,000 to help them to buy family homes in London and stop the haemorrhage of experienced staff out of the capital's schools.

The "golden handcuffs" scheme will be directed at "school leaders of the future" in their thirties and forties who would otherwise be forced to move out of London because they cannot afford to buy a family home. The scheme is part of a £5bn package of housing assistance for teachers, nurses, police and other public- sector workers announced yesterday by John Prescott, the Deputy Prime Minister.

Teachers will qualify for £1bn of assistance, with every teacher in London becoming eligible for interest-free loans of up to £50,000 to buy a flat or house. Teachers who do not want to buy a home will qualify for cheaper rents, Charles Clarke, the Secretary of State for Education, said yesterday. "Raising standards in London means recruiting the best teachers and then keeping them here," Mr Clarke said.

Teacher turnover rates are higher in London than the rest of the country - at 15 per cent compared with 11 per cent - with many teachers saying they have been forced out by high house prices.

Research by Ofsted, the schools watchdog, and the National College of School Leadership has found that the quality of middle management is a vital factor in raising standards in schools.

Mr Clarke said the scheme, called Key Teacher Homebuy, would give equity loans of between £50,000 and £100,000 to up to 1,000 "school leaders" over two years starting next April. He said: "We know that quality leadership raises standards in schools and we want the best leaders to stay in London."

The loans would only have to be paid back quickly if recipients either left teaching or moved out of London. While they remained in London schools, teachers could keep the value of the loan as they moved house.

The Department for Education and Skills said details of who would qualify for the larger loans and how the money would be repaid were still to be decided. The schemes follow the launch of the London Challenge earlier this year, to raise standards in the capital. They will replace the Starter Homes Initiative, launched two years ago, which offered loans of up to £20,000.

Critics of the original scheme argued that the cash restriction had limited the project's success. So far only 4,500 of an intended 11,000 workers have taken advantage of the scheme. Lecturers at further education colleges will also be included in the key worker scheme for the first time.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "We support this innovative scheme. Problems of teacher retention in London need to be addressed by a range of measures. London teachers leave the capital in large numbers, just at the point where they are ready to take on leadership and management responsibilities. This results in an overreliance on newly qualified teachers and employment-based training groups.

"This scheme, we hope, will be an important element in the drive to retain experienced teachers in the capital."