Cabinet clashes over future of LEAs

A Cabinet dispute has broken out over the future role of local education authorities amid warnings that the Government is putting their survival at risk by channelling money direct to schools.

A Cabinet dispute has broken out over the future role of local education authorities amid warnings that the Government is putting their survival at risk by channelling money direct to schools.

David Blunkett, the Education and Employment Secretary, clashed with John Prescott, the Deputy Prime Minister, over Mr Blunkett's plans to hand more money to headteachers rather than distribute it through councils.

Jack Straw, the Home Secretary, backed Mr Prescott, the minister responsible for local government. Mr Straw, who has faced a similar dilemma over funding for police, said the Government would be blamed for "every problem in every school" if heads received their money direct from Whitehall.

It is understood the rearguard action by Mr Prescott and Mr Straw forced Mr Blunkett to water down some of his radical plans on school funding. "He reassured John Prescott that he did not want to abolish local councils," one cabinet source said yesterday.

A compromise hammered out by the Cabinet will be disclosed today when the Government publishes a Green Paper on town hall finance. Downing Street said it would preserve the local education authority role in education but ensure more money got through to schools.

The document will confirm that the share of the education budget being spent by schools should rise from 80 to 90 per cent over the next two years, while the amount going to local authorities falls from 20 to 10 per cent. But councils will retain control of transport, the special needs of disabled children and excluded pupils.

Ministers are worried that, while the most efficient local education authorities spend barely 10 per cent of their budgets on administration, others spend up to 25 per cent. They want more of the money spent on books, equipment and classroom salaries.

But the moves have alarmed council leaders, who also accused the Government of by-passing them when the Chancellor, Gordon Brown, announced in his March Budget that secondary schools would each receive up to £50,000, and primary schools up to £9,000, directly from Whitehall .

An ally of Mr Blunkett said: "We need to think positively about the role local authorities will have in 10 years. We don't want a battle about what their role was in the 1980s. The schools are the unit of delivery now. In the past, it was the education authorities, whose job now is to support schools rather than do it for them."

Mr Blunkett wants to ensure greater openness about where the education budget is spent and is taking reserve powers to "ring-fence" money for schools so it is not soaked up by local authorities. He told the National Association of Head Teachers in July: "There can be no let-up in our drive for higher standards and greater opportunities for all our children.

"As part of this, we need greater clarity about the role of local government in education funding and must ensure as much money as possible gets to the frontline where it belongs."

During cabinet discussions, Mr Prescott is said to have championed a continuing role for local government in education. "He was worried that the Government had started down a dangerous track and wanted to know where it would end," said one ally.

The Tories have promised to abolish local education authorities and transfer the money saved to the classroom. But Labour says the Tory plans are unworkable because individual schools could not afford to run their own transport, and local councils would still have a role under the Conservative scheme in providing services such as special needs.