Nowhere is the slowdown in the growth of the grant-maintained sector more starkly reflected than in banks’ attitudes to schools. Margins have been squeezed as competition has increased in a faltering market, says Bob Russell, the Bank of Ireland’s national education manager.

“The market has slowed considerably,” says TSB senior product manager David Brophy. Banks are already assessing the impact of a change of government on their schools market.

Yet Bob Russell remains “vibrant” about “continuing marketing success”. And Yorkshire Bank is gearing up for what it hopes will be a fresh surge of business with the new Education Bill allowing GM schools to borrow commercially to finance capital spending.

These three minor banks are all major players in the battle for schools’ business with special financial packages. Behind the marketing, the basic ingredients are much the same - interest-bearing cheque accounts, payroll services, free banking for “normal” (but not necessarily all) transactions, credit card facility, electronic banking services and financial advice.

Research by the Co-operative Bank confirms that schools, none too surprisingly, want a high return on funds, easy access to cash, no hidden costs and full support and understanding from the bank. Beyond minor variations in the basics and competing interest rates, the differences are in the small print, with the banks offering a variety of special perks and services.

For example, Yorkshire’s LMSGMS Account claims to take the bother out of having to switch funds between accounts by offering the same credit interest rates across all accounts, including Parent Teacher Association and holiday club funds. Its primary schools saving accounts are linked to a range of special offers, such as a video lending library, educational gifts and school trip discounts.

By contrast, the Co-operative Bank organises, at a “competitive” price, school cash collections by a security firm. It also runs a partnership scheme whereby schools can pool budgets and share administrative services to gain higher credit interest and cut costs.

Some banks also offer specific incentives for opening an account. For example, the Bank of Ireland hands out Industrial Society training vouchers of between Pounds 125 and Pounds 350.

The buzzword is flexibility. If a bank wants a school’s business, it will negotiate a tailor-made package. So it is worth comparing what the banks offer and presenting your own list compiled from the best bits from each bank’s package.

Two of the big four banks have recently decided to give their schools business more prominence - Midland with its education account and Lloyds with a school managers’ account.

Other banks continue to work on an individual basis. The Royal Bank of Scotland, which is researching the likely impact of lifting the borrowing bar on GM schools, allocates a “relationship manager” to do a deal with any school wanting to become a customer. NatWest leaves it to regional offices to devise tailored packages for each school.

* Bank of Ireland Tel: 017533 517777 Stand B33Co-operative Bank Tel: 0161 832 3456 Stand G21Lloyds Tel: 0171 626 1500Midland Tel: 0113 296 2000NatWest Bank Tel: 0171 920 1494 Stand H27Royal Bank of Scotland Tel: 0131 556 8555 TSB Tel: 0121 600 6000 Yorkshire Bank Tel: 0113 247 2000