Cash lure to increase opt-out schools

Shephard offensive to exploit Labour's divisions over education policy

Popular state schools may be offered cash "sweeteners" as part of a campaign by the Government to encourage more schools to become grant-maintained.

Gillian Shephard, Secretary of State for Education, is examining a scheme to offer popular schools the chance to bid for one-off cash grants over the heads of their local education committees. The scheme would be designed to give head teachers and governors a taste for direct funding by financing an expansion of facilities to let them meet demand for places.

The idea was pioneered by John Redwood, Secretary of State for Wales, to persuade more state schools in the principality to opt out of local authority control. Wales only has 17 grant-maintained schools, which are directly funded by the Government ratherthan through local councils.

Mrs Shephard has told colleagues that she wants to "plant seeds" to establish more grant-maintained schools in Labour heartlands such as Cleveland where local councils still control all the state schools. Mrs Shephard will also use the expansion of specialist schools, announced last month, to encourage more parents and schools to opt for grant-maintained status. All grant-maintained and local education authority schools will be eligible to become specialist schools, to develop a strength in a particulararea such as modern languages. Mrs Shephard hopes local authority specialist schools will be encouraged to become grant-aided.

The twin track strategy will make the expansion of grant maintained schools one of the political battlegrounds of the new year. The Government is determined to exploit Labour's disarray over the future of opted-out schools following Tony Blair's decisionto send his son to a grant-maintained school in London.

Ministers believe Labour's confusion presents them with an opportunity to increase the number of grant-maintained schools despite the hostility of Labour-led local education authorities.

However, the offensive to expand the grant-maintained sector masks Cabinet disquiet at the Government's failure to meet its targets for the growth of opted-out schools. The Government's target is to have a million pupils in grant-maintained schools, about 20 per cent of the pupil population, by January. In November grant-maintained schools catered for only 625,000 pupils.

Labour's shift on education continued yesterday with confirmation that Labour leaders are considering a graduate tax, under which graduates might pay between £6,000 and £8,000 in tax contributions for their education during their working lives.

The tax would be designed to reform the system of student loans which has come under strain with the expansion of higher education. David Blunkett, the Shadow Education Secretary, said it was one of the options being studied.

He said the clash with the Tories over grant-maintained schools would highlight the Government's preference for an education elite, compared to Labour's concentration on raising standards for all.