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Budget setting delayed by squabbles with Whitehall

Rows between central and local government are threatening to delay essential information needed by schools to set their budgets.

Charles Clarke, the Education Secretary, made earlier teachers' pay and funding settlement announcements in the autumn as part of a package designed to provide more certainty to schools and avoid a repeat of last year's crisis.

But arguments between local councils and Whitehall on the detail of the settlement could now cancel out those gains and delay the process in some areas.

Several councils are understood to be in dispute with Department for Education and Skills officials about how they spend their share of the extra pound;120 million of emergency education funding allocated to 51 of the hardest-hit authorities.

Newham education authority in east London had agreed a formula to share out its extra pound;1.7m with its schools, giving priority to those in difficulties through no fault of their own.

But Graham Lane, Labour leader of the council, said that the DfES had wanted to see more than half the funding go to two secondary schools with the biggest deficits. His authority had been in limbo because of the dispute. But it would prefer not to have the funding at all rather than allocate it in the way that civil servants had suggested.

"If this money goes to the wrong schools we won't solve the problems because they will just run up deficits again," he said.

Mr Lane, who is also education chair of the Local Government Association, said several other authorities were involved in similar disputes with the DfES.

Cambridgeshire County Council has accused the Government of causing unnecessary delays in attempts to resolve a separate education funding dispute.

The authority managed to set its budget this week after reaching a compromise agreement with the DfES over school funding levels.

Mr Clarke had threatened to use his statutory powers to intervene over the council's original plan to pass on to schools just 71 per cent of the funding rise his department had expected.

Keith Walters, Conservative leader of the council, said the issue would have been resolved faster if the DfES and the deputy prime minister's office had agreed to a three-way meeting.

The authority had been struggling with preserving school budgets and keeping down council tax bills. He said the Government had realised the seriousness of the situation too late.

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