Councils to have less control over school funds

Councils will have less control over school funding but more freedom to borrow money for capital investment under government plans announced yesterday.

Councils will have less control over school funding but more freedom to borrow money for capital investment under government plans announced yesterday.

Headteachers said the proposals to introduce a per-pupil funding formula were welcome but did not go far enough. Councils said the paper was "a victory for local democracy".

A Green Paper, called Modernising Local Government Finance, proposes a fixed sum for primary and secondary pupils across the country which would be adjusted to take account of deprivation and teacher recruitment difficulties. But it rules out, for the present, the idea of ring-fencing schools' money so that councils would be compelled to pass it on.

Local education authorities would remain responsible for school transport, special educational needs, improving failing schools and expelled pupils.

Government sources emphasised that the plans did not amount to the straightforward national funding formula which heads had demanded.

David Hart, general secretary of the National Association of Head Teachers, said the proposed reforms were "a major step in the right direction" but the suggestion that councils would be under a moral obligation to pass on the money was mistaken. "History tells us that nothing short of a legal requirement on every local authority to give schools their money will do the trick," he said.

John Dunford, general secretary of the Secondary Heads' Association, said: "A fixed sum per pupil across the country with an index for deprivation will increase equity between schools. The way the money is to be distributed to schools by local education authorities is critical and threatens to continue the funding muddle."

The Green Paper says no schools would be disadvantaged by the new system. Instead, there would be a "levelling up". The cost, Baroness Blackstone, the Higher Education Minister said yesterday, could be hundreds of millions of pounds.

Council officials would still decide, in consultation with heads, how much money should go to individual schools but the Government could intervene if it believed schools were being deprived unfairly.

The Green Paper says the Government would be prepared to introduce a legal requirement for councils to pass on funding if the voluntary system does not work.

Graham Lane, chair of the Local Government Association's education committee, said: "The paper makes it clear that ring-fencing funding for schools is not an option. The association considers this to be a victory for local democracy. The Government has supported the role of local education authorities in providing vital services for schools."

Theresa May, the shadow Education Secretary, said: "This is a fudge. Labour are still going to hold back money from schools and keep it in the centre."

Hilary Armstrong, the Local Government Minister, said: "I want to end the situation where responsible local authorities have to get permission from central government every time they want to borrow to invest in their community."