Graham Lane, LGA education chair, said: 'The LGA welcomes the reduction from 44 to six grants in the Standards Fund. This is exactly the cut in bureaucracy we urged government to implement.
'But while such positive moves to get cash into schools are welcome, the LGA must warn against any proposals for a national funding formula which may prevent town halls from providing vital education services.
'It would be ludicrous to suggest Whitehall sends out 25,000 cheques direct to schools based on a per pupil calculation. This is a simplistic solution to a complex situation.
1) Standards Fund
The LGA welcomes the measures announced by the Secretary of State, which the LGA has been pressing for. In particular we welcome:
- proposals to reduce the number of separate ring-fenced grants from 44 to 6
- allocations by formula rather than by bidding
- ensuring that allocations are announced in advance
- allowing schools to carry over unused allocations from year to year
- simplifying the red tape associated with the Fund; in particular by scrapping the system of making payments only in response to claims after expenditure has been incurred
2) Future funding of schools and LEAs
A Green Paper is expected in July on options for changing the system of grants to local authorities to contribute towards the services they provide. Government and LGA officials have been in discussions over the last 15 months and a joint report went to the Central Local Partnership; (which brings together ministers and the political leadership of the LGA), in March.
Any changes are not likely to happen in the short term. They will almost certainly require primary legislation which would not be introduced until the next Parliament.
The LGA and the government agree on:
- measures to make the system more stable and more predictable, including examining three year funding settlements, mentioned by David Blunkett in his speech
- the aim of making the system fairer and more transparent
We welcome the Secretary of State's comment that funding disparities should be addressed by levelling up rather than levelling down
*the implicit assumption that this will require new money in the system
However the LGA does not agree with ring-fencing school budgets on the following grounds:
- it could lead to more bureaucracy, not less;
- it runs counter to the government's 'joining-up' agenda. * ring-fencing schools budgets could lead some LEAs with not enough for joint working with other services
- LEAs are already delegating the lion's share of their budget to schools, and the figure is rising - DfEE sources indicate that they expect it to rise from 82% last year to 85% this year
- local authorities are collectively spending more than the government's formula indicates; over last year and the current year this amounts to£600m
The LGA understands from DfEE officials that the secretary of state is not proposing a national funding formula for schools; even under a ring-fenced system it would still be up to the LEA to set out, through a Fair Funding formula similar to the current arrangement, the precise funding each school would get.
The LGA is keen to explore with government ways in which the current system can be made more transparent short of ring-fencing. For example the current formula for determining government grant could be recast so as to distinguish between school and LEA functions; governors and headteachers would then be able to see at a glance whether the money is getting through to schools or not.