Has Clarke passed?

This week Charles Clarke, the Education Secretary, celebrates a year in office. He arrived in the midst of the A-level fiasco, but has waded into a crisis of his own over school budgets. Richard Garner delivers his report on the first 12 months

Tomorrow, Charles Clarke celebrates the anniversary of his appointment as Education Secretary. He may be feeling pretty chuffed at how he is handling his tough and politically contentious brief - particularly university top-up fees - after Estelle Morris's uncertain regime. But the champagne is likely to be kept on ice in the education world, where his friends and enemies sense that unforeseen events may be causing him to stumble.

Even the teachers' union that is friendliest to him, the National Association of Schoolmasters Union of Women Teachers (NASUWT) led by general secretary Eamonn O'Kane, talks of the past year as being "a bit dramatic" for Clarke because school funding went so "pear-shaped". Doug McAvoy, general secretary of the rival National Union of Teachers (NUT) - who has received the Clarke cold shoulder since refusing to sign the national agreement on reducing teachers' workload - is altogether more dismissive. "We welcomed Charles Clarke's appointment, but I am now persuaded by his September statement that we can all make mistakes," he says. The statement was Clarke's online message to schools at the beginning of the academic year when he apologised to headteachers for "mistakes" over this year's budgets.

The new Education Secretary arrived at Sanctuary Buildings - the headquarters of the Department for Education and Skills (DfES) - to find a department in turmoil after Morris resigned in the middle of a fiasco over A-level marking. One year later, he is dogged by a different crisis - the one over school funding that no one had foreseen. Whether he has handled this as cleverly as he could is questionable. The received wisdom is that he was badly let down by his civil servants over the figures (they should have foreseen that a concurrent rise in National Insurance contributions and a change in local funding formulae would produce an almighty squeeze on some school budgets), and the resulting furore is therefore not his fault.

The comprehensive spending review settlement, which explains how much money schools will have to spend, had been talked up as a record deal. Heads expected to be in the pink - to have more money to spend on books, equipment and staff. They certainly didn't expect to be laying people off. The dashing of those expectations has led to bitter recriminations. Clarke's critics point out that - whatever the origins of the crisis - the Secretary of State has to take responsibility for what went wrong.

It is an assessment with which Clarke himself would probably agree. Having arrived at the DfES with the reputation of a big hitter who would punch his weight in Cabinet - and with Downing Street - and would stand no nonsense from anyone, he was seen as his own man. There was no need to "spin" him. He had the experience to deal with ornery backbenchers, demanding trade unions and a hostile press. As right-hand man to the Labour leader Neil Kinnock when the party began its return from the abyss, he knew how tough politics can be - and how long it can take for political fortunes to change.

It was a fearsome reputation. In fact, he joked at the outset that he needed to show more of his "feminine side". But it was not the whole story, because Clarke not only has toughness, he also has brainpower. He can understand the intricacies of higher education funding and, most importantly of all, he can elucidate the philosophy behind top-up fees, an issue that many think would have been too taxing for his predecessor had she stayed in office. "He started almost from square one and looked at the problem and all the options," says an insider of Clarke's attitude to the thorny top-up fee issue. "He was methodical and rational in his approach, but terribly quick in being able to assess those options."

Although he has won plaudits from vice-chancellors, the Russell Group [the universities with medical schools] is critical of the proposed £3,000 maximum top-up fee which it believes is too low. And there is a general feeling that he and Downing Street were too slow to go on the offensive and win friends for the package.

That is changing. The theme of recent Clarke speeches is that top-up fees are an egalitarian measure, because no one will pay until after they have graduated and can afford to, and those from underprivileged homes will receive help.

A senior Labour MP confides that, during the course of 24 hours, he had talked to three of his party colleagues who had originally opposed the plan, but were now "wavering" or planning to support it in the Commons. "When you talked to people about top-up fees, people seemed to think it was just an extra charge that they would have to pay upfront like the tuition fee - no matter what we said," says the MP. "That perception is changing now."

Another seasoned political observer adds that Clarke should have "no qualms" about being defeated in the Commons over top-up fees. Others believe that the issue is still too early to call, and that Clarke will have to pull some rabbits out of the hat during the passage of the Bill - by, for example, giving a cast-iron guarantee that no one from a deprived background will have to pay towards the cost of their course.

On the schools front, Clarke's progress is being seen as a case of two steps forward, one gigantic step backwards. He has managed to kick the controversy over the future of the examination system into touch with the setting up of an inquiry by Mike Tomlinson, the former Ofsted chief and this decade's education "Mr Fixit". Colleagues say Clarke is cooling on radical reform of the examination system, and does not share his deputy David Miliband's enthusiasm for a baccalaureate-style approach to post-16 studies.

The other step forward - and it is seen as merely a small step by teachers' leaders, although possibly it was a giant leap for Downing Street - is over primary school reform. Here, Clarke is shifting the emphasis from testing seven-year-olds to having their teachers assess them. National targets for 11-year-olds in maths and English have been dumped in favour of individual targets for schools. (The famous 2002 targets of 80 per cent reaching the required standard in English and 75 per cent in maths have been unmet for two years.)

Most people in the education world approve. One senior headteachers' leader, who admits to being no fan of Clarke's, claims, however, that he is being "too political" in his decisions on primary education - putting political acceptability ahead of the needs of pupils. Heads say they were given the impression by Stephen Twigg, another of Clarke's deputies, that he favoured a bolder move in the Welsh direction, where they have abolished seven-year-old tests altogether and never had primary school league tables. But Clarke probably realised that he wouldn't be able to go that far in alleviating the strain of the "three Ts" - testing, targets and tables - on primary schoolchildren without incurring the wrath of Downing Street. His decision may not be enough to head off a damaging boycott of national curriculum tests next spring by the NUT. A ballot is expected later this term.

The funding crisis - Clarke's gigantic step backwards - is widely seen as his Achilles heel. Clarke hopes that his pledge of a guaranteed funding increase in real terms for each pupil in every school, and the earmarking of an extra £800m over the next two years, will avert any further trouble. His critics are sceptical - especially as he needs to fund two costly elements of the new teachers' contracts (the limit on covering for absent colleagues of 38 hours a year from next September, and the guarantee of 10 per cent of time away from the classroom for every teacher for marking and preparation from September 2005). "If he cannot deliver on funding and Labour goes into the next election facing cuts in education, then he's for the high jump. Well, if not for the high jump, then his political stock will have fallen," says David Hart, general secretary of the National Association of Head Teachers.

On the other hand, if he does manage to pilot a Bill on top-up fees through a sceptical Commons, his star will be in the ascendant. Here, he will receive help from his still relatively new higher education minister, the former postman Alan Johnson, who didn't go to university but will argue that the new package for expanding higher education would have given him the chance.

Any final assessment of Clarke's worth will have to wait - though he can't be happy at the unending stream of stories about the effect of the funding crisis. Headlines about teachers losing their jobs is certainly not good publicity for an Education Secretary one year into the job.

Charles Clarke: A Life in Brief

Born: 21 September 1950.

Family: Son of Sir Richard Clarke, former permanent secretary at the Ministry of Technology, and Brenda, née Skinner, psychologist. Married Carol Marika Pearson, a researcher whose mother comes from Estonia, in 1984. Two sons.

Schooling: Highgate School, London.

Higher education: King's College, Cambridge, studying maths and economics. Became President of National Union of Students in 1975.

Employment: Maths teacher, Willesden High School, Brent, north-west London ­ now one of the new privately-sponsored City Academies.

Researcher to Neil Kinnock, who was Labour's shadow education spokesman (1981-3). Chief of staff to Kinnock as Labour leader (1983-92).

Chief executive, Quality Public Affairs, a consultancy that advised local authorities ­ 1992-7.

Labour MP for Norwich South since 1997.

Junior minister, Department for Education and Employment, 1998-9.

Minister of State, Home Office, 1999-2001.

Chairman of Labour Party, 2001-2.

Secretary of State for Education, 2002-

r.garner@independent.co.uk