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Are you ready to take the plunge?

Whitehall is hoping the new leadership money will encourage schools to work together. But it's not as simple as that, says Nic Barnard

HOW TO give half a billion pounds away and still upset people: it's the sort of thing the Government has become rather good at. When the new leadership incentive grant was announced in last summer's comprehensive spending review, it seemed a typical new Labour initiative: vague concept, shiny title, wads of cash and a nasty sting.

Right from the beginning, we were told it put under-performing heads at risk. "There is no scope for weak or uncommitted leadership in secondary schools," the Whitehall paper Investment for Reform said. Guidance on the new grant issued in December said on page one: "The grant must help to lever change."

By April, Charles Clarke was talking like a hitman of "taking out" headteachers and heads of department. Local education authorities had to be "completely ruthless", he said, metaphorically stroking the barrel of his revolver. Officials followed with an email asking local authorities for - among other things - a list of heads for the chop. Unions were outraged; others just sighed. And asked: is this really what the grant is for?

The Leadership Incentive Grant pays pound;125,000 a year for three years to 1,400 secondaries to spend on strengthening their leadership. Whitehall sees this pound;525 million pot as confirming its philosophy - first expressed by Estelle Morris - that the next wave of school transformation will come from schools themselves. The cash goes to any secondary school in an excellence in cities (EiC) area, excellence cluster or education action zone (EAZ); any other secondary with more than 35 per cent of pupils eligible for free school meals; and any secondary where fewer than 30 per cent got five top-grade GCSEs in the past two academic years.

How the lucky 1,400 decide to spend it is surprisingly loosely defined. The department sees it as representing a new hands-off style, seen again in the relaxing of central diktat on primary tests and targets last month. The grant should help raise standards and "strengthen leadership" at all levels, leadership being judged largely by its impact on pupil performance.

That could mean promotions (or sackings), advanced skills teachers, mentors, even recruitment and retention bonuses to beef up the quality of a department.

"It would not be a good use of funds simply to employ additional staff, buy new equipment, or make alterations to the building," the guidance warns.

But even these could be justified in the context of, say, a new vocational GCSE aimed at disaffected boys.

There is one important caveat, though: schools must collaborate with other schools and produce a brief plan to outline how they will do so.

Collaboration is the department's new watchword. Collaboratives should mix successful and one or more problem schools. Most are based on existing EIC or EAZ partnerships. For those not in either, there's an extra pound;50,000 a year to fund collaborations, usually with neighbouring schools.

These four-page plans, covering only part of the pound;125,000, are all heads have to produce. How they spend the rest is up to them (although failing schools will be closely monitored by LEAs).

Department for Education mandarins have now gone through the 190 submissions. One in 10 were too poor to approve; unless they produce something better, the schools won't get the money. A similar number need more work. But the rest range from good attempts to "amazing", given that they were written in less than two months.

Such a process is intended to be light touch, but has nevertheless prompted accusations of bureaucracy. Schools were expected to examine their own leadership - and, in their collaborative groups, one another's leadership - as a basis for their plans.

The December guidance included a detailed leadership assessment tool for the former and a similar peer assessment tool for the latter. That raises an apparent contradiction at the heart of the grant: how can you promote leadership - with all its connotations of independence and personal vision - while telling schools how to go about it?

David Hart, general secretary of the National Association of Head Teachers, says: "What was initially a light-touch process has become somewhat bureaucratic."

The National Union of Teachers goes even further. John Bangs, the union's head of education, says: "It's a top-down dictatorial concept that believes government can interfere in micro-management."

But having vetted the plans, Whitehall says it will now let schools get on with it - although officials will check progress annually. Some collaboratives may be invited to act as laboratories, piloting new DfES policies, or as think-tanks, brainstorming on issues such as deprivation where the department is looking for ideas.

Some collaborations are fairly low key. Others involve major pooling of resources: Hereford schools are putting 85 per cent of the grant into a central pot. Birmingham wants groups of schools to create a collective 14-19 curriculum with students moving between schools for different subjects. Others plan to guarantee a place to every local child. One group is considering appointing non-teachers to assistant headships, to lead on pastoral issues.

Plenty there to please Downing Street policy wonks. The genesis of the grant lies somewhere between Nos 10 and 11. The emphasis on transformational leadership fits Number 10's idea of modern, thrusting public services moulding themselves in the image of business - "It's an Andrew Adonis idea, I suspect," one union leader sniffs. But it also satisfies Gordon Brown's penchant for getting money to the inner cities.

Bypassing LEAs is a bonus.

Estelle Morris, Clarke's predecessor, had pitched for a substantial investment from last summer's review for schools facing challenging circumstances. The department wasn't quite expecting what it got but at half a billion quid,was more than happy to run with it. If only the timing were better. The grant arrives just as many schools contemplate deep cuts in a funding crisis largely of the Government's own making.

"Many heads have fallen on it as manna from heaven because of their bloody awful budgets," says the NUT's Bangs. "They'll be thinking very creatively about how they use it."

Meanwhile, schools that aren't getting the grant are furious, especially as recipients include high performers such as the London Oratory and even some grammar schools in Excellence in Cities. "It's the biggest cliff edge in a funding system that has too many cliff edges," John Dunford, general secretary of the Secondary Heads Association, says.

There are a few smaller pots of cash for a number of borderline schools to fund collaboration but those aside, you either get the grant or you don't.

So how will ministers measure the success of a grant that gives heads so much discretion? The DFES wants three outcomes: first, results rising faster in schools that get the grant than elsewhere. They may have to wait: changes in leadership are reckoned to take up to five years to affect results.

Second, an impact in Ofsted reports - the new inspection framework starting in September will put more emphasis on leadership. Ofsted says leadership is already very good or excellent in half the schools. So, for all the rhetoric, don't expect more than a handful of heads to be "taken out". For a start, LEAs don't dismiss them - governors do. More vulnerable are likely to be the middle ranks. The cost of laying off the typical head of a middle-sized school who has eight to 10 years' experience is about pound;50,000, while laying off a head of department would cost about pound;40,000. Many heads are expected to "restructure" their teams.

"Even in well-run schools, there are senior staff who see themselves as managing the timetable rather than leading improvement," one DfES official says. The grant could enhance pensions to encourage early retirement or send department heads back to the classroom without losing pay. But if heads spend it that way, it won't go far.

The third aim is simply that schools collaborate more. That should be self-fulfilling. But it could prove the biggest test.

"When we started, we thought there were likely to be some parts of the country where competition was so deep in the bone that they'd find collaboration difficult," one official says. "What we've had back tells us that isn't the case."

But the same ministers who urge collaboration remain committed to a system of specialisation that encourages schools to set themselves up as different - as specialist schools, beacon schools, city academies and the rest.

Parental choice means schools continue to compete for students.

And league tables, the biggest incitement to compete of all, remain firmly in place. The leadership incentive grant could have its work cut out.

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