24/04/2003

LEAs blamed for funding shortfall

The Education Secretary has accused local education authorities swallowing up vital funding earmarked for schools – and instead diverting the money to capital projects elsewhere in council areas.

In his speech to the NASUWT conference in Bournemouth, Charles Clarke passed the budgetary hot potato onto local associations, saying that nearly a quarter of LEAs were planning to use "more than £2 million of revenue funding for capital projects".

He went on to say that some LEAs were holding back funding from schools – claiming that some £339 million is yet to be allocation.

Mr Clarke added that, according to preliminary figures, "more LEAs than expected appear not to have passported 100% of education formula funding to education, despite indicating - as recently as February - that they would".

He said: "Two of the authorities where there are particularly vociferous complaints from schools have the lowest council tax levels in the country. They have both failed to passport 100% of this year’s education increase and both also choose to spend significantly less on their schools than they are funded for.

"There are big variations in the proportion of the increase in Schools Budget which is actually being passed to schools. In three quarters of LEAs the increase in funding that is going direct into the individual budgets of schools is lower than the overall increase the LEA has made for school funding."

However, he conceded that there were increased pressures on school budgets – pressures introduced by the Chancellor – in which employers would pay a higher rate of National Insurance contributions on their employees.

Mr Clarke concluded by emphasising his government's commitment to education saying that this year spending per pupil would rise by £800 – and there are now, he claimed, 20,000 more teachers and 80,000 support staff than were there six years ago.

However, the Local Government Association went on the offensive today and rejected Mr Clarke's criticisms, saying instead that a major change in the funding system introduced this year had caused "considerable turbulence both in schools and local education authorities".

LGA chairman, Sir Jeremy Beecham, said: "This year local councils are spending £100 million more than the government has allocated on their local schools, so claims that in general councils are underfunding and holding back money provided by central government are unfounded.

"Indeed 25% of the money spent on schools is raised locally, by council tax. Councils are demonstrating their commitment to education by increasing council tax in many areas to fund additional support for schools."

Sir Jeremy called for money to be injected into the education system, saying that despite local councils spending "£4.3 billion above the government’s own provision" problems were recurring.

Also at the conference, Shadow Education Secretary Damian Green accused Labour ministers of "hiding the true scale of the crisis which threatens to increase class sizes and make teachers redundant".

Mr Green said that despite Labour promises to spend an extra £2.6 billion on state education, schools are being deprived of the funding needed to maintain provision for children.

Mr Green added: "This situation has arisen precisely because the over-centralisation of education has created a funding system so complicated that despite spending more money than ever – the reality is, in the words of one head, ‘far and away the worst situation I have ever had to manage'."

The Conservative frontbencher also produced a report on 30 authorities which he claimed were losing a total of £55.7 million in funding.

There is expected to be a special Commons debate on the matter when Parliament reassembles next week.

(GMcG)

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