Vice chancellors and National Health Service officials have reached an agreement over new arrangements for nurse training.

The Committee of Vice Chancellors and Principals and the NHS executive are due to announce that training contracts between institutions and health authorities must be for at least five years.

The decision will be welcomed by universities, which have complained about the disruption and planning problems caused by contracts as short as 12 months.

Institutions with short contracts have faced competition for their best staff as well as the prospect of lost investment in resources when a bid to continue to provide training is unsuccessful.

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The new pact allows for a run-down period of two years when a university loses its next contract bid after a minimum of five years training nursing and midwifery students. But there is uncertainty over who will pick up the bill for redundancy payments to nursing teachers, whose conditions of service are protected by European law, when a bid to renew a contract is lost.

The CVCP would like the NHS to provide an indemnity to pay all redundancy claims, and has rejected an informal offer to cover half the costs and for the indemnity to last for just five years. The NHS is now in discussions with the Treasury over a solution offered by the CVCP, but an official said this week: "We are still hoping to get 100 per cent of costs." Even if this was agreed, it would have to gain approval in Parliament.

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The talks follow the introduction of national guidelines for the incorporation of colleges of health into higher education. The colleges have traditionally been run by regional or local health authorities. But the abolition of regional authorities by next March, if legislation is approved, means that universities will take on responsibility for running nursing, midwifery, physiotherapy and radiography courses.

Meanwhile, some institutions were expressing their delight at winning their next round of contract bids. Thames Valley University has been awarded a five-year contract worth more than Pounds 15 million by Anglia and Oxford Regional Health Authority to provide nurse education in Berkshire, while Plymouth University's bid to incorporate the Tor and South West College of Health has been approved by the South and West Regional Health Authority.