Direct funding could cost schools £200m, says LGA

13 Jan 05
Direct funding would lead to fresh financial turmoil in schools, creating an annual national shortfall of £200m, local government leaders warned this week.

14 January 2005

Direct funding would lead to fresh financial turmoil in schools, creating an annual national shortfall of £200m, local government leaders warned this week.

But criticism of Whitehall plans to fund schools directly from 2006, effectively bypassing local education authorities, was quickly dismissed by Department for Education and Skills officials.

The Local Government Association claimed schools face a funding black hole unless the DfES revises proposals in the Education Bill, which faced the scrutiny of the House of Lords this week.

Individual councils are warning that the sector could experience a repeat of the 2003 funding row that, they claimed, left schools some £600m short and led some authorities to cut staff and close sites.

Alison King, chair of the LGA's children and young people board, said that by bypassing councils, the government had created a democratic deficit that would discourage LEAs from raising cash to top up schools' central grants.

Currently, they raise an additional £200m locally for schools each year. King said: 'Some councils simply won't be able to justify "giving" funds to institutions divorced from the democratic process, because elected members will have no influence over the way schools serve their community.

'The problem councils now face is that they are being forced to decide between being democratically accountable and transparent and continuing their generous commitment to schools.'

But a DfES spokesman said: 'Our… proposals to reform the school funding system will deliver financial security, improve schools' ability to plan ahead and end the confusion of funding streams and responsibilities between local and central government.'

Privately, DfES officials fear that some councils could launch a scaremongering campaign, blaming Whitehall for any future funding problems but failing to continue topping up school cash pots in order to, as one source put it, 'make a political point'.

The LGA would not support that agenda. But a spokeswoman said: 'The decision to give schools additional cash raised locally will be made by individual councils. Many schools could lose out if the [DfES] proposals are introduced.'

PFjan2005

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