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TOUGH NEW CASH TARGETS ARE SET FOR LOCAL EDUCATION AUTHORITIES

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Pressure on local education authorities to delegate more money to ...
Pressure on local education authorities to delegate more money to

schools has meant that the proportion of the schools budget going

directly to schools this year has increased from 82.4% to 84.2% -

worth an extra£385m, education and employment secretary David

Blunkett announced today.

The increase is a direct result of the government's Fair Funding

system which means heads have increased financial responsibility for

school meals, building repairs and maintenance, and a range of other

support services including personnel and financial administration.

Mr Blunkett announced that in 2001-2002 education authorities would

be expected to delegate at least 85% of their budgets to schools, an

increase on this year's requirement of 80%. Spending per pupil on

administration would be expected to fall further.

Mr Blunkett also published tables of individual local education

authority expenditure for the second year which showed the variations

in amounts spent on town hall bureaucracy.

Mr Blunkett said:

'We have a substantial increase in the amount of money going to

schools. This year's increase brings to about£1bn the amount of

increased delegation since 1997.

'Some local education authorities who were spending too much on red

tape have met our targets on cutting red tape and some have seen

reductions by one-third or more. We set out our tough new approach

for the first time last year to ensure that schools got the maximum

amount due to them. Since 1997, we have given schools substantially

increased control over the funding which the government has provided

for primary and secondary education.

'The minimum requirement for 2000-2001 was 80%, which authorities

have now met. We now intend to ensure that all authorities reach 85%

for 2001-2002, although we believe many authorities should be able to

reach 90% next year and we shall be setting a further tough minimum

requirement for 2002-2003.

'Nationally, delegated funding per pupil has gone up this year by

9.8% or just over£210. This figure, which includes Standards Fund

resources devolved to schools, reflects increases in the overall

level of funding as well as increases in the level of delegation.

Over and above this figure, schools will have benefited from the

£290m School Standards Grant, which included payments of up to

£50,000 for secondary schools and up to£9,000 for primaries,

announced in the Budget.

'Authorities have generally met delegation targets and heads and

schools are seeing the benefits. There are a small number of

authorities, who for different reasons, have not meet one of the

targets. We will be discussing with them individually how we can

ensure they meet the targets in the future.

'I welcome the positive response of the vast majority of authorities.

But the table which I am publishing today shows that the delegation

of school budget still ranges from 79.8% at the bottom to 89.8% at

the top. I want to see a much greater number approach the level of

the top delegators.

'Earlier this month, I told the NAHT conference that we were

examining the possibility of establishing separate budgets for local

education authorities and schools, to ensure that all the funding

intended for schools gets through to them. The government's Green

Paper will spell out the details.

'Meanwhile 49 local education authorities are already delegating at

least 85% of their Local Schools Budgets. I believe that the

remainder can follow suit. Some authorities are nearly at this level

already. For others, the increase will be more challenging. The

authorities currently delegating 85% or more are varied in size and

include rural and urban authorities.

'I am therefore setting a minimum target of 85% delegation for

2001-2002. 85% delegation under Fair Funding equates to about 98%

delegation under the system which we inherited from the previous

government, which by 1997 had reached 90% of delegation.

'I believe there is also room for further savings on central

administration, building on the progress that authorities have

already made. I therefore propose to lower the present ceilings -

£75 per pupil for London and£65 elsewhere - by£5 for 2001-2002.

'There are of course some things where it is important an education

authority continues to co-ordinate services centrally which anybody

seriously considering this issue has to take into account: statements

for children with special educational needs, school transport and

help in turning around failing schools are obvious examples. It would

of course be irresponsible for anybody to pretend that these services

didn't have to be delivered.

'Fair Funding is not just about putting more money into schools'

delegated budgets. It is about giving greater autonomy to schools.

Heads are able to ensure they get the best value and the highest

quality. We will be taking further steps to ensure that this happens.

These steps include:

- a purchasing guide which we shall publish in the autumn, to help

schools make the best use of the extra money we are giving them

- a pilot to develop 'brokerage' arrangements, under which schools

can use an agent to 'shop around' on their behalf for the best

buy

- an investigation of the way LEAs are costing the services which

they are inviting schools to buy back from them, to ensure that

the prices suitably reflect costs

- a thorough review of the financial controls which LEAs currently

impose on schools, with a view to producing a more 'light touch'

regime

- rigorous investigation of specific instances where schools have

complained that local education authorities are interfering with

their freedom to manage

NOTES

1. Tables provide full details of each local

education authority's planned expenditure; a full explanation of

the figures in each column is given in the attached notes. All

LEAs have been given the opportunity to check the figures

published in the tables.

2. For 2000-01, the government set three targets for LEAs:

- 80% of the Local Schools Budget (LSB) to be delegated. All LEAs

have reached this target except Cornwall LEA which at (79.8%) has

virtually met the target.

- delegated funding per pupil to be increased by 5% in the case of

LEAs delegating at least 85% of the LSB in 1999-00, and 6% in

other cases. This has been achieved by all but six LEAs

- a£65 per pupil ceiling (£75 in London) for central administration

expenditure (achieved by all LEAs). The calculation of the targets

is more fully explained in the notes to the table.

3. Under the previous school funding regime (LMS), LEAs had to

delegate at least 85% of the 'Potential Schools Budget'. The PSB

excluded some major items of LEA central expenditure, including

school transport, school meals, all Standards Fund expenditure,

and some expenditure on SEN and behaviour support. Targets under

Fair Funding have been based on the much larger Local Schools

Budget, which includes all recurrent expenditure on primary and

secondary education (except expenditure on nursery school and

non-school provision for under-fives, and one or two other minor

items), plus some expenditure on the strategic management of the

education service as a whole. It follows that 85% of the LSB

equates to a much larger percentage of what the PSB would have

been for 2000-01.

4. Under Fair Funding, the main items for which LEAs have been

required to delegate funding (where they were not doing so

already), include building repairs and maintenance (from April

1999); secondary school meals (April 2000); and a range of other

support services including personnel and payroll administration

(April 2000). Additionally, individual schools have the right to

opt for the delegation of funding for insurance (April 1999) and

primary and special schools may likewise opt individually for the

delegation of meals funding (April 2000). Funding currently held

centrally by LEAs in respect of these 'optional delegation' items

amounts to a little over£200m.

5. The Purchasing Guide has been designed to reinforce the

operation of Fair Funding by helping schools to develop their

confidence and expertise as buyers of services and users of

external contracts. It will describe educational support services

and how they are delivered, illustrate how schools should

determine their needs for services or goods, and give advice on

how to identify the market for supply. It will also advise schools

on the growing area of e-commerce. The guide will draw on the work

of the DfEE's Value For Money Unit and external consultants, and

will be published on DfEE's website in the autumn term.

6. The Pilot 'brokerage' project will take place in Rotherham from

April 2001. It was proposed by consultants from the Office for

PublicManagement (OPM) as part of a package of measures in

response to Ofsted's critical report on the authority.

The OPM report can be accessed at

http://www.rotherham.gov.uk/pages/council/opmreport.htm

The primary objective of the pilot brokerage service would

be to work with and for the schools of Rotherham to secure the

best possible value-for-money services. Its major functions would

be to (i) work with schools to help them specify their service

needs; (ii) develop a sufficient market to enable schools to have

choices in obtaining high quality services which represent value

for money; (iii) identify the providers of the best value for

money services; (iv) negotiate, on the schools' behalf, clear

contracts for services; and (v) manage and monitor service

contracts. DfEE will monitor closely the Rotherham pilot and

believe it could have significant implications for stimulating the

market for schools services both regionally and nationally.

7. This summer, the DfEE will carry out an in-house study into the

costing of services offered by local education authorities to

schools on a buy-back basis.

8. Financial controls. Each local education authority has a

'scheme' for financing schools which is approved by the Secretary

of State and must take account of statutory guidance issued by

him. The scheme controls the financial relationship between the

authority and its schools, particularly in the fields of financial

monitoring, banking, balances, income, and supply of services.

This summer DfEE will be consulting local education authorities on

updating these schemes, with the aim of a move to a more 'light

touch' regime.

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