Heads to be given control of pounds 1bn

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SCHOOLS WILL be able to decide for themselves how to spend a further pounds 1bn after the biggest shake-up of education funding for a decade.

Money for services such as school meals and building repairs will be transferred to schools from local authorities, under government proposals released yesterday. Enterprising head teachers will have the chance to save money for their schools by looking around for the best deals on the market.

The changes, which will be in place by 2000, will give all schools the kind of freedom over their budgets enjoyed by schools that opted out of local authority control under the previous government. At present, the proportion of the schools' budget delegated by local authorities varies.

Ministers are determined to address criticisms that existing arrangements allow local authorities to spend excessive amounts on bureaucracy. They want to make funding more transparent by ensuring that all schools have the same chance to control services.

The consultation paper lays down a clear separation between the spending areas that will be controlled by schools and local authorities. It proposes to limit town hall spending to school transport, special education needs, advice on raising standards and planning for school admissions and expansion.

For the first time, schools will have the option of controlling their own bank accounts, money for building repairs, payrolls and insurance, school meals and staffing, such as long-term supply teachers. They will be able to buy services from local authorities or shop around.

From 2000, authorities will also have to delegate funds to secondary schools for school library and museum services. Primary schools will receive ear-marked funds for these.

The proposals ensure that opted-out or grant-maintained schools will retain their existing financial freedom despite Labour abolishing grant- maintained status.

Ministers have responded to criticism that delegated school budgets have led to a decline in music tuition by promising that money from a central government standards fund will be used to ensure that there are no further cutbacks in music.

Estelle Morris, the School Standards minister, said: "This is the biggest and most wide-ranging extension of financial decision-making to schools since the introduction of local management of schools."

The Government will publish a table of how much each local education authority spends on each of the services it retains. Those authorities that are spending an excessive amount on administration will be capped.

Teachers' leaders were cautious. David Hart, general secretary of the National Association of Head Teachers, said: "It must be right that schools should be responsible for making decisions about how their budgets can best be used to support the delivery of the best possible service at the sharp end. But it will still be necessary to make sure that local education authorities do not retain any more money than is absolutely necessary."

Doug McAvoy, general secretary of the National Union of Teachers, said: "Increased delegation will not necessarily improve the ability of schools to meet pupils' needs and could lead to them buying services on the basis of cost rather than quality."