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Reducing the part councils play in passporting funds to schools would not benefit education and could damage commun...
Reducing the part councils play in passporting funds to schools would not benefit education and could damage communities, research warns.

A study commissioned by the Rural Services Partnership anticipates the local government finance green paper due later this year. The green paper is expected to explore options such as ring-fencing school budgets and a national funding formula for schools.

The study questions the government's argument for ring-fencing school budgets, namely that councils spend too much on red tape. According to the partnership, spending on councils' education activities includes special education, school meals, home-to-school transport and strategic management. Administration only takes up 2.2% of councils' non-capital education expenditure.

The study finds the government would have to do a tremendous amount of research to produce a funding formula sensitive enough. For example, small rural schools have more expensive unit costs. If this was not taken into account they might have to close.

Report author Rita Hale said allocating money fairly to 24,000 schools would be extremely difficult. 'If the Department for Education and Employment gets the standard spending assessment badly wrong there's still the local authority between schools and the DfEE who can say this isn't enough, we can see what you need to run your schools and which can get extra money either from council tax or from squeezing services.'

Norfolk CC strategic director of resources David Horne said the report confirmed 'there's no good reason why the secretary of state should separate local authority and school budgets and develop a separate funding formula'.

'Local authority spending on administration is much lower than the government's pronouncements suggest and even lower in rural authorities,' he said.

The rural services partnership and the financing of education will be published on 14 July. Copies of the report can be obtained by calling 020 7905 2528.

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