Clarke pledges cash to end schools crisis

The Government climbed down from a confrontation with local education authorities yesterday and promised a two-year cash settlement this autumn that would guarantee every school enough extra money to meet rising costs.

Charles Clarke, the Secretary of State for Education, dropped his hard line towards councils, which he had blamed for withholding more than £500m from schools, when he addressed their annual conference in Manchester yesterday. An earlier draft of his speech was changed to drop a passage warning of an end to the "Big Brother'' days of local authorities running schools.

Instead, he offered the settlement and agreement on a package ensuring every school received "a per-pupil increase at least high enough to meet costs". He also called for teachers to have a two-year pay deal to allow schools to budget ahead.

Ministerial sources said next year's education budget rise would include a £1.4bn increase above costs, plus a similar amount the following year.

Mr Clarke told the Local Government Association (LGA) conference: "I believe the relationship between us is extremely important and I want to put time and energy into making it a strong and effective relationship."

The stance was at odds with briefings over the past nine weeks, which had sought to blame local education authorities for this year's funding crisis. A survey by The Independent showed it would lead to nearly 1,000 teachers and more than 500 classroom assistants being made redundant. His department's officials had indicated that councils would have their wings clipped over financing schools or even lose control of funding altogether.

Mr Clarke said: "Other political parties have talked of a national funding formula for schools. We don't want to go down that path.''

He told the conference of a headteacher who had said to him she had "no time for the unseemly squabbling between local and central government and I think she has a point.

"But if we fail to do it then at the end of the day people will look to other solutions.''

As a first step, the Government will consider reversing this year's decision to cut the amount of money it gives in central grants to schools for improving standards, instead allowing councils to distribute the money. The figure is planned to fall further next year from £1.7bn to £1.5bn but that decision is on hold after schools that lost the grants claimed they were not getting any compensation from councils and were being forced to make redundancies.

Mr Clarke's conciliatory tone was welcomed by local authority leaders although they noted there was no promise of an overall cash increase in the comprehensive spending review settlement for education over the next two years.

Graham Lane, leader of the LGA education committee, said: "The minister has obviously listened to our arguments here. What we didn't want over the next two years was the kind of turbulence we've had this year.'' There would have to be negotiations with the Treasury.

Conservative members of the LGA feared there would not be enough extra funding to cover the national agreement to reduce teachers' workload. Under that initiative, teachers will stop doing 25 administrative tasks from September. The tasks will instead be done by classroom assistants.

Peter Chalke, the Conservatives' local education authorities spokesman, said: "So far only £60m has been allocated against a cost of £1bn.'' He said that the shortfall could lead to strikes by the more militant unions.

Damian Green, the Conser-vatives' education spokesman, said Mr Clarke's speech had been "cynically tailored to ensure that the Secretary of State got out of the room alive and intact''.