Agency to fund opt-out schools: The White Paper on education proposes one of the biggest transfers of responsibility since the 1944 Act

A NEW Funding Agency for opted-out schools will gradually take over responsibility for providing school places from local councils as more schools choose grant-maintained status.

That shift - the single most radical feature of yesterday's education White Paper - represents one of the biggest transfers of responsibility from local to central government since the 1944 Education Act.

Ministers have accepted, however, that they cannot force the pace of opting out, because the Government is determined to retain the guiding principle that parents are free to choose whether they want the school to leave its local authority. They have therefore decided to create a system which is able to cope with the slow but steady decline of local education authority power - a transition which will probably last beyond the 1990s.

The Government says it 'hopes that over time all schools will become grant-maintained', but the White Paper gives no indication of how long that will take.

Only 300 opt-outs have been approved since schools became free to seek grant-maintained status four years ago - a tiny proportion of the 23,000 maintained schools in England and Wales. The White Paper estimates, however, that the number of opted-out schools will rise to 1,500 by April 1994, and that most of the 3,900 secondary schools will have opted out by 1996.

As soon as one in ten schools in any local education authority have opted out, the responsibility for providing sufficient school places will be shared between the local authority and the Funding Agency.

Once three-quarters of schools have opted out - which might mean three-quarters of secondary schools - the Funding Agency will acquire sole responsibility for providing enough school places in that area. Education authorities which want to shed their responsibility earlier will be able to apply to the Secretary of State to be relieved of their duty.

The Funding Agency - a streamlined bureaucracy led by a committee of 10 to 15 members appointed by the Secretary of State - will distribute funds to opted-out schools mainly according to pupil numbers. The White Paper says, however, that 'the formula will also be able to take account of other objective differences between schools'.

The big question confronting governors and heads who are contemplating opting out - will we be better off? - is left unanswered. As larger numbers of schools opt out in each local authority area, the Government proposes to introduce a new 'common funding formula' to replace the present central grant to local councils. But it is not clear whether the extra 15 per cent for administration costs will continue to be paid to opted-out schools for very much longer.

Moreover, the White Paper hints that special funds for grant-maintained schools will diminish over time: grants, for example, which are currently paid to opted-out schools to help them run their own budgets, or develop the national curriculum. But special funds for major projects will continue, notably refurbishment and repairs of buildings, and the development of specialities such as technology teaching.

Most importantly, perhaps, the White Paper pointedly promises additional money for popular schools to expand by putting up new buildings.

The Funding Agency will also be free to propose the building of new schools to meet increased demand in any area. In some cases, the White Paper suggests, successful grant-maintained schools might take over the premises of an unpopular school which has run down to the point of closure.

Also, any voluntary group - including a group of parents, if they choose, or a religious denomination - will be able to propose the creation of a new school. They will have to cover 15 per cent of any initial capital costs, but, if their plan is approved by the Secretary of State, the school will be funded like any other opted-out school.

The White Paper emphasises the Government's view that spending per pupil has risen by 40 per cent in real terms since the early Eighties, and that its proposals offer opportunities for increased value for money. On that front, the White Paper proposes a renewed effort to eliminate more of the 1.5 million surplus places in schools, mostly in small primaries which local authorities have struggled to close.

The Funding Agency will be able to propose closure plans in areas where there are surplus school places, and where schools are failing. But the Secretary of State will also acquire new powers to direct the agency, and local authorities, to present rationalisation plans for schools, submitting them to an independent public inquiry where necessary.

Since the evolution of a new school structure will take time, the Government is inviting local authorities and grant-maintained schools to work out joint admissions arrangements for pupils - including a right for local authorities to direct parents towards grant-maintained schools.

Those education authorities which want to move quickly towards a new role as 'enabling' bodies, rather than education administrators, will be able to abandon the requirement to have an education committee. The main responsibilities remaining with local authorities will be special needs, educational psychology and welfare, and home-to-school transport - but they will also have increased powers in the first instance to tackle failing schools.

A series of minor barriers which the Government believes has been slowing down or frustrating opt-out plans are to be eliminated. Governors will no longer have to pass two resolutions; one will be enough. The Secretary of State will be able to reimburse schools for the cost of an opt-out campaign, and the school's legal expenses. Schools seeking to opt out will be free to ask for a change in their character at the same time - to create a new sixth form, for example. Opted-out schools will also be able to offer part-time nursery education or after-school care if they wish, but they will not receive extra funds from the Government.

Ministers recognise that secondary schools will lead the move towards grant-maintained status, because they are larger, and therefore more able to benefit from autonomous management. In an attempt to accelerate opting out among primary schools, schools of fewer than 100 pupils are being offered the opportunity to opt out as a 'cluster' group, with each school retaining control over its admissions, while sharing management services. In areas where the cluster of primaries feed a single secondary school, the secondary school will also be able to join the cluster.

Choice and Diversity, A new framework for schools; HMSO; pounds 8.60.