Shephard dashes hopes over pay funding

Schools should manage their money better, Gillian Shephard, the Secretary of State for Education, said yesterday, writes Judith Judd.

Her restatement of the Government's opposition to funding the teachers' 2.7 per cent pay award will disappoint parents and teachers campaigning against education spending cuts.

Councils say thousands of teachers will be sacked if the cuts go ahead. Ministers say schools can find the money from productivity and reserves.

Mrs Shephard told the Industrial Society that few schools evaluated the cost of their plans. "Effective financial management means considering the costs and opportunities of alternative plans."

She said her department was running a pilot scheme in which 40 primary schools in five local authorities pool financial information.

She said warnings about the effect of cuts on education had proved false. Leicestershire and Devon, which had originally said they could not find the money to fund the teachers' award, now had done so.

Governors in Lancashire meet tonight to discuss whether to join those in Oxfordshire, Warwickshire, Shropshire and Gloucestershire in resigning or setting deficit budgets. Lancashire county council says 400 teachers' jobs may have to go.