Instead, children's minister Margaret Hodge said the Department for Education and Skills would concentrate on providing greater "support and recognition" as it recruits an extra 6,000 foster carers.
But Felicity Collier, chief executive of the British Association for Adoption and Fostering, said that while the proposals could go some way towards increasing recruitment, it would have little effect on retention.
"We have got to have a radical review of how we remunerate foster carers," she said. "It is not a cheap option.
"It would be very helpful to have a much greater commitment to remunerating carers for the levels of skills and qualifications they have.
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