More cash for schools paid for with more holes in roads

Other services face sacrifices as Labour boosts education, writes David Walker

MIDDLE England's car axles are going to pay the price of Labour's determination to increase funds for schools. Early signs from the council budget conclaves taking place this month are that roads maintenance is being slashed to sustain education allocations, presaging a rash of potholes next winter. Libraries and old people's homes are also likely to suffer.

Even so, council taxes are set to increase across the country, probably by an average of 12 per cent - well above the officially approved rise of 7 per cent. This means the tax for an average owner-occupied home will rise to pounds 664 from this year's pounds 593.

Labour looks likely to realise its unacknowledged ambition of cutting council-tax rises in the London area, where borough elections take place in May. There the average rise could be below 10 per cent. Councillors are in earnest discussion with ministers about adjusting the formula for grants for 1999, to try to avoid a sharp increase then.

It is in the county areas of England, from Cambridgeshire to Shropshire, that the Government's insistence on giving priority to education will result in substantial cuts to social-services spending, even the closure of old people's homes. In many areas schools budgets will be kept up only at the cost of further reductions in library opening hours and cuts in book-purchase funds.

Labour councils, fearful of being accused by party colleagues in government of failing to fulfil the Prime Minister'spromises on schools, are squeezing their other spending.

Last year John Prescott, Secretary for Environment, Transport and the Regions, claimed that an "extra" pounds 835m was being pumped into the council grant to boost schools spending. Councils say this "extra" was calculated on the basis of what the Tories said they should be spending rather than their actual budgets, so in reality it amounts to a lot less.

The Liberal Democrats - the second strongest party in town and county halls after Labour - say Mr Prescott cheated. Councils will need to find pounds 560m of Mr Prescott's "extra" from their own funds, either from increased council tax or savings.

An informal survey for the Independent on Sunday indicates that many councils will be adding substantially to their schools budgets, over and above what will be needed to pay the teachers' 3.8 per cent pay rise. It appears that at least pounds 500m more than the 1997-98 official baseline will go to schools.

However, Tory-controlled Wandsworth in south-west London is complaining that its total grant has been slashed and it faces cuts to its schools budget. It cannot raise much extra from its council-tax payers withoutbeing "capped". So class sizes are set to rise.

In Oxfordshire the county council (where no party has control) says its grant for all services has increased by only pounds 600,000. To give education extra would mean cutting social services.

Even in solid Labour Barnsley, a generous share to schools could entail "drastic" cuts in leisure services and highways, and reductions in support for the regional public transport system.

In Cambridgeshire, schools will get pounds 2.5m more than last year, well short of the county's share of Mr Prescott's total. Even so, the Conservative- controlled county plans to close old people's homes in Wisbech and Peterborough.