and JUDITH JUDD
A repeat of last year's uproar over school spending cuts looked inevitable last night, after it became clear that the Government will not fund next year's teachers' pay award.
Instead, the pounds 300m thought to be needed for salary increases will have to be found from the pounds 770m earmarked for education in the the local authority settlement, announced yesterday by the Secretary of State for the Environment, John Gummer. Teachers predicted this would lead to further rises in class sizes and up to 10,000 redundancies.
At the same time, the Government eased the capping rules on councils - now chiefly controlled by Labour and the Liberal Democrats - to allow them to impose council tax increases of up to 15 per cent next year, in the run-up to the general election.
County councils are to be allowed spending increases of at least 3 per cent and metropolitan authorities at least 2 per cent. Those rises could push up the average Band C council tax of pounds 543 by between 10 and 15 per cent. The package has been designed to make it difficult for councils to claim that they cannot pass money earmarked for education directly on to schools.
In a direct challenge to Labour, Mr Gummer said that the new capping regime, announced as part of next year's spending regime for local government, would allow "greater flexibility".
"Authorities repeatedly said that they would use such flexibility in a responsible way and would not take this as a licence for a general increase in spending and taxes. The Government and council-tax payers will watch with interest how authorities respond. We shall see where their true instincts lie," Mr Gummer said.
But local authorities said yesterday that they were already spending pounds 2.1bn above the level the Government specified for last year, so the increase does not even cover existing levels of spending.
Parents and governors who last year campaigned vigorously for the teachers' pay award to be funded centrally, and not by local authorities, said they would continue the fight.
Around pounds 300m of the pounds 770m promised for schools in the Budget will be eaten up by the teachers' pay rise in February, expected to be around 3 per cent.
Gillian Shephard, the Secretary of State for Education, last night wrote to the Teachers' Pay Review Body, making it clear that the Government would not fund the award as it has sometimes done in the past.
The remaining pounds 470m of the money announced in the Budget will only cover inflation and rising pupil numbers.
Doug McAvoy, general secretary of the National Union of Teachers, accused ministers of shirking their responsibilities by forcing councils to put up their council tax bills.
"We will go into a downward spiral of worsening class sizes and redundancies. How many is difficult to say because we don't know how the local authorities will respond," he said.
Simon Goodenough, chairman of the National Governors' Council, said: "We will be pushing very hard for teachers' pay to be funded centrally."
Frank Dobson, Labour's local government spokesman, settled for a low estimate of the possible council-tax increase. He said that on the Government's figures "it could rise as much as 5.2 per cent" but that with higher charges for school meals and services such as home helps, the average household was likely to face a pounds 108 increase next year.
Budget projections of future spending pointed to council tax payers having to find an extra pounds 3.5bn over the next three years, roughly equal to 2p on the standard rate of income tax, he added.
The Liberal Democrats said: "The Government seems to be saying there should be more spending on education, but they are not prepared to pay for it."
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