Schools in England and Wales face staff shortages unless the government funds “significant” increases in teacher pay, according to an independent body advising the government on teachers’ salaries.

The School Teachers’ Review Body (STRB) said the offer of a 1% pay rise should be accepted, but only because the Department for Education (DfE) said it would not fund additional increases. Any further pay rise would have to come out of existing school budgets.

“Based on our assessment of recruitment and retention considerations alone, there is a case for an uplift higher than 1% to the national pay framework, to strengthen the competitive position of the teaching profession at a time of growing demand for graduates,” argued the STRB’s report to the education secretary, Nicky Morgan.

“However, we are required to take other considerations into account, including schools’ readiness to manage the consequences of a higher uplift, given the government’s clear position that there will be no additional funding.”

The report’s authors concluded: “However, if current recruitment and retention trends continue, we expect an uplift to the pay framework significantly higher than 1% will be required in the course of this parliament to ensure an adequate supply of good teachers for schools in England and Wales.

“Accordingly, we recommend the department and our consultees take steps to help schools prepare for such an eventuality.”

In her response, Morgan said she planned to accept all of the report’s main recommendations, although she made no comment on the recruitment and retention problems identified by the STRB.

Morgan also welcomed a proposal allowing schools to offer a salary advance scheme for housing rental deposits.

Chris Keates, the general secretary of the National Association of Schoolmasters Union of Women Teachers, said: “Had the review body not been constrained by the arbitrary pay cap imposed by the government, there is no doubt that it would have been recommending a pay uplift higher than 1% for teachers.”

Kevin Courtney, acting general secretary of the National Union of Teachers (NUT), said it was “shameful” that Morgan had failed to address the STRB’s concerns over staff shortages.

“Teachers have suffered six years of pay freezes and pay limits, which have cut their pay by almost 15% in real terms. No wonder graduates are turning away from teaching as a career and serving teachers are leaving in increasing numbers,” Courtney said.

According to the STRB, recruitment and retention pressures “have become more acute, creating a challenging climate for schools”, with shortfalls in teacher training numbers and shortages in specialist subjects.

“Figures show a significant increase in the number of teachers resigning from the profession – including higher wastage in early years – at a time when pupil numbers are increasing, adding to the demand for teachers,” the report said.

“Our analysis of earnings data showed that the relative position of teachers’ earnings has deteriorated further this year, and they continue to trail those of other professional occupations in most regions.

“We are concerned about this further deterioration in the recruitment and retention position when set against strong demand in the graduate labour market and continuing concerns in the profession about workload.”

The STRB also rejected a proposal from Morgan that experienced teachers could be “stepped down” to lower pay scales, arguing that the option might be welcomed by teachers who wanted less responsibility. It had been opposed by the teaching unions, who argued that schools might use it to put pressure on older teachers.

The STRB’s report was published by the DfE after a long delay. It was finally unveiled on Wednesday morning, just as the long-awaited Chilcot report into the Iraq war was presented to parliament.