07 May 2004
Local authorities could move to three-year budgets in the Spending Review after the prime minister promised schools longer-term financial planning this week.
In a speech to the National Association of Head Teachers, Prime Minister Tony Blair said schools needed the 'financial stability and autonomy to plan budgets effectively'. He conceded that last year's funding changes caused 'serious problems' – referring to the bitter row between the government and local education authorities after budget shortfalls.
As part of the Department for Education and Skills' Spending Review programme, Blair said schools would move to three-year budgets with 'assured funding to underpin them'. He added: 'We would like these budgets to be aligned to the school year, not the financial year, reflecting the way you do business as managers.'
As councils provide funding for schools, this is the firmest indication yet that local authorities will join their colleagues in Scotland on three-year budgets. These have proved successful north of the border and the Local Government Association has been pushing the government for more stability, particularly in the light of this year's caps on council tax.
Sarah Wood, director of economic and environmental policy at the LGA, said she would welcome any move to three-year budgets. 'We have been involved with discussions with the Treasury,' she told Public Finance. 'Part of the CPA assessment is future financial planning, and this would just build on what is already there.'
The finer details of the new arrangements will be revealed in July, but this could lead to two funding systems in place. Local education authorities will operate on a financial year basis and schools on a school year, which could distance education from councils even further.
The NAHT welcomed Blair's announcement 'providing the money was right'. But it sparked a row among the teaching unions by giving the government until the end of this year to provide more funding for its classroom workload agreement. Head teachers claim the deal is too expensive and could lead to job losses without extra cash.
The National Association of Schoolmasters/Union of Women Teachers accused the NAHT of being hypocritical.
'The truth is that some heads have finally read the agreement's provisions and realised the days of managing teachers by exploiting a vague and all-embracing contract have gone forever,' said deputy general secretary Chris Keates.
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