21 February 2003
Charles Clarke's determination to force two councils to 'passport' education funds is nothing short of a unilateral declaration of independence against the rest of Whitehall, the chief executive of Westminster City Council warned this week.
Peter Rogers told Public Finance that the education secretary's decision last week to use his reserve powers to force Westminster and the London Borough of Croydon to spend millions of pounds extra on education was an attack on other departments.
'The Department for Education and Skills is now ignoring all other government departments. If we are required to "passport" and it takes all our grant, how do we then fund all our services?' he asked.
According to Rogers, Westminster has been told to spend an extra £9m on education but it received only £7m in extra grant for 2003/04. Croydon accused the department of 'getting its sums wrong' and 'being detached from reality'.
Both councils were issued with directions from the DfES last week after spending plans showed that Croydon intended to 'passport' 74.8% of the department's desired level of funding and Westminster 59.6%. 'In these two cases the authorities had proposed school budgets that would not allow their schools to meet pay and price increases next year,' Clarke said.
The direction, the first time the powers have been used, will exacerbate the authorities' already tenuous financial positions. Both received only floor increases, 3.5%, in the annual grant settlement. They will also have to swallow a 29% increase in the Greater London Authority precept.
Both have traditionally low council taxes but Croydon is expecting an increase of 27%, and Westminster said its rise could easily be in double figures. Both are due to meet Clarke in the next few days to press their case.
The Local Government Association reacted with fury to Clarke's intervention. Its chair, Sir Jeremy Beecham, immediately wrote to Deputy Prime Minister John Prescott asking him to intervene. He questioned why Westminster, rated as 'excellent' by the Audit Commission, and Croydon, a 'good' council, should be subject to such strict intervention. He added that it undermined the government's commitment to give high-performing authorities more autonomy.
'This does undermine the CPA,' Beecham told PF. 'Other departments could seek the same arrangements and there could be no end to this once you start.'
PFfeb2003
