10 January 2003
Sir Jeremy Beecham, chair of the Local Government Association, has demanded an assurance from Education Secretary Charles Clarke that he will not exercise his reserve powers to ensure the extra funding is 'passported' through to schools.
The LGA has identified 13 authorities with a 'funding gap', where their increase in education formula spending share (FSS) is higher than their overall increase in grant.
The association believes that if Clarke used his powers to ensure these authorities passed on the full increase to schools, their rises in overall grant would be swallowed up and they would have to eat into spending on other services. The alternative would be to risk voters' wrath by hiking up council tax.
In a letter to Clarke, Beecham described the funding gap as 'an issue of major concern' for authorities.
'If they were to passport the full increase through to schools, this gap and all the other pressures on local services, for example on social services or environmental management, would have to be funded from council tax increases,' he warned. 'If you decide to set a minimum budget it may be impossible for these authorities to achieve the balance of spending and taxation that has been agreed with local people.'
Essex County Council is facing the largest funding gap: its education FSS has increased by £34.9m, but its overall FSS has increased by just £27.3m, leaving a £7.6m shortfall.
Other authorities facing a shortfall include Kent, at £3.7m; Hampshire, at £3.1m; Barnet, at £2.4m; and West Sussex, at £2m.
Beecham and the LGA's director of economic policy, Neil Kinghan, are due to meet schools minister David Miliband and local government minister Nick Raynsford on January 13, the day before the consultation period ends, to press their concerns.
Miliband provoked fears that the government's reserve powers might be exercised in December, when he wrote to all head teachers detailing schools' funding increases. He assured them his department was 'taking steps to ensure that the extra funding gets through to your schools' and referred to the reserve power, which was introduced under the Education Act 2002.
The LGA also fears that if ministers used the reserve power it would throw authorities' budget- setting into chaos. Beecham wrote: 'I therefore urge you to announce that, in view of the particular circumstances that apply this year, you do not intend to use the reserve powers.'
PFjan2003
