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Cries of anguish from schools over this year's budgets stunned Labour ministers who saw education cuts as a thing o...
Cries of anguish from schools over this year's budgets stunned Labour ministers who saw education cuts as a thing of the past.

With £2.7bn extra going to schools, the Department for Education & Skills assumed there would be plenty.

But ministers tried to impose a new funding formula on the system while schools faced other pressures. And they left too many decisions to council education departments about how the money was to be distributed locally.

As a result, teaching unions say the government got its sums wrong. The National Association of Head Teachers claimed one in six schools faced 'catastrophic' cuts.

Education secretary Charles Clarke hinted that he is open to new ways of getting money to schools next year - schools might be funded from Whitehall rather than the town hall.

A DfES survey of education departments suggested £590m had still to be allocated to schools. Many councils increased central budgets for special needs or disruptive pupils by more than they had raised schools budgets. Some capitalised revenue funding. And huge variations existed within councils between what schools received.

These pressures might have been manageable without the new funding system, which mixes a basic pupil entitlement with extras for economic disadvantage and rural primary schools.

And though some schools blame national funding changes for staff cuts due to falling rolls or their decision to award performance bonuses to all their senior staff, despite only having funding for some, many seem to have been genuine losers.

However, this year's crisis may have longer lasting effects. Both prime minister Tony Blair and Mr Clarke are believed to favour a national funding agency similar to the Funding Agency for Schools, which used to fund grant-maintained schools.

Labour returned the GM school funding to education departments five years ago, and deputy prime minister John Prescott and chancellor Gordon Brown fear a national agency would deflate general council budgets.

But any new agency could distribute funds directly to schools. General funds and earmarked resources might be allocated with a single budget statement explaining how the money is to be used.

Heads would then have the freedom to decide how to spend the budget. Since they would be subject to inspections and external audit, there is no need for as many budgetary restrictions.

Council education departments could still maintain their strategic roles, such as special needs provision, running referral units or buying school bus services. They would receive a separate budget and remain free to top up local school budgets through the council tax.

Councillors say this would remove accountability and local sensitivity from funding distribution. But others believe a clear and transparent funding route must be better than this year's charade.

Conor Ryan

Education consultant

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