Headlines: January 10th, 2003

Local government leaders are warning that some authorities may have to cut services or raise council taxes unless the government rethinks its school spending plans.The schools minister, David Milliband, has written to all local authorities and to head teachers setting out his expectations on the amount of funding that should be passed directly to schools in next year’s budget. And he has made it clear that the government will use reserve powers in the new Education Act to set minimum budgets if councils fail to allocate the full funds to schools.

The Local Government Association has expressed strong concerns about the plans and is warning that some councils will not be able to comply. Sir Jeremy Beecham, the chairman of the LGA, has written to the Education Secretary, Charles Clarke, setting out the problems.

In the letter he says, “The LGA calculates that for 13 authorities the rise in the schools’ block of their education formula spending share, which they are being requested to passport to schools, is more than their increase in formula grant. If they were to pass on the full increase to schools, this gap and all the other pressures on local services would have to be funded from council tax increases.”

He says other councils will also be badly affected. “For many other authorities, though their position is slightly less stark, there will also be significant implications for other services or council tax levels,” he adds. Sir Jeremy is also reminding Mr. Clarke of earlier promises that the Act’s reserve powers would be used only in exceptional circumstances.

“Given the turbulence in funding this year we strongly believe these new powers should not be used,” he writes. Sir Jeremy and other senior local government leaders will stress their concerns when they meet ministers next week to discuss local councils’ views on the Revenue Support Grant  plans for next year.