In April 1995 appraisal moved into a new critical phase which could determine whether it lives or dies in its developmental form. This phase was prompted by the fact that specific appraisal funding available from the government was withdrawn. This was not a phenomenon which suddenly appeared - the DfEE had made it clear from the introduction of Appraisal Regulations in 1991 that direct funding would cease after four years. Direct funding was replaced by appraisal being eligible expenditure under GEST Activity 1 for School Effectiveness at least for the 1995-6 year, though this has not been continued. By placing appraisal firmly under this heading there has been a reinforcement of the view of appraisal continuing as a review and development process rather than a performance, pay related process. Also interesting in this respect is the fact that many commercial and industrial organisations are moving firmly towards a review and developmental approach to appraisal, linked in some cases to a competency based approach.