News analysis - Schools and councils clash over funding

24 Feb 05
Consultation launched on schools' three-year budgets even as plans progress through Parliament

25 February 2005

Consultation launched on schools' three-year budgets even as plans progress through Parliament

Head teachers are very happy. Thanks to the Education Bill, they will soon be able to get their hands on three-year ring-fenced school budgets, bringing some much-needed financial stability to the school sector.

As promised in the Department for Education and Skills five-year strategy, from April 2006 a Dedicated Schools Grant, immune from local authority interference, will be passed directly to schools.

David Hart, general secretary of the National Association of Head Teachers, said that a ring-fenced education grant, which stops local authorities from 'leaking money into other services and makes sure that every authority spends every penny it should on schools, has to be the right way forward'.

John Dunford, Hart's counterpart at the Secondary Heads Association, agreed that the extra security three-year budgets will bring to schools was most welcome. They will also help to bypass the problem of local government's inefficiency in releasing funds down to school level, he told Public Finance.

Dunford added: 'The setting of budgets is made much more difficult when budgets come in during the last few weeks of the financial year or, disgracefully, once the financial year has already begun.'

But local government is smarting. 'Nobody is against autonomy for schools but this is taking autonomy a step too far,' said Alison King, chair of the Local Government Association's children and young people board.

'Ring-fencing does remove what we feel is an important strategic role and [hinders] a more integrated approach to the children's agenda,' she said. 'It certainly isn't helpful to pick off bits of what local authorities do when we're trying for a more holistic approach.'

Elaine Simpson, managing director of Education Walsall, echoed this view. 'I've worries that the new arrangements may mitigate against local flexibility,' she told an LGA conference on February 21.

'I'm worried that what we have striven so hard to achieve… is threatened by the focus on autonomy and independence.'

A further concern is the timing of the consultation. The DfES released a consultation paper on the new system on February 17, but the legislation to set this up is already halfway through Parliament.

'Consultation, proper evidence and democratic process must not be reduced to lip service,' King said.

Senior education managers are worried that ring-fenced budgets may not deliver the desired improvements in schools, a point that made in January in a Commons' education select committee report, which explored the so-called funding crisis of 2003/04.

'There is no proper evidential basis for saying that change is merited, and no way of being confident that the changed system will adequately address any problems that exist,' MPs said.

Jon Mager, head of lifelong learning at East Riding of Yorkshire Council, said it was chilling to read the select committee's report.

'We must argue very strongly that change and improvements in the funding system must be firmly grounded in evidence,' he told the LGA.

Mager and other senior education officers make a strong case for the continued importance of local authorities in education. He maintains that they will continue to help schools get to grips with the problems raised by financial management.

He added that there were questions about the wisdom of giving financial autonomy to schools. 'Heads are a mixed-ability bunch when it comes to financial management,' he warned.

Here LEAs could find themselves on a collision course with head teachers determined to go it alone. John Dunford of the SHA said there was 'no question' about heads' ability to manage funds.

He said: 'Most secondary schools have bursars to deal with the day-to-day running of schools and heads have acquired a good deal of expertise since 1990.

'There remains a role for local education authorities in assessing local priorities but this should not affect the national funding entitlement, which is going to be ring-fenced.'

But LEA chiefs are urging heads not to get too territorial. 'All of us should take the view that we are doing the best for all children,' Mager said.

Simpson added that success will only come if the focus was on interdependence rather than independence. 'An area is a family of schools, strong and inter-dependent,' she said. 'Only if we package [change] that way, will we move forward.'



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