The Assembly government expects all authorities to make a 1 per cent saving between 2005-8 as part of a drive to save pound;600 million by 2010 across all public bodies. But a survey of all 22 authorities shows how the plan is affecting education budgets.
Research compiled by the teaching union NASUWT Cymru shows that nine authorities cut their education budgets by 1 per cent in 2005-6, and a further four cut budgets by 0.5 per cent. Five chose to protect education and made no efficiency savings.
Union secretary Geraint Davies said: "Some authorities have passed 1 per cent on to schools while others have absorbed it in the main budget. This is a stealth tax on behalf of the Assembly government. It's clawing back money from local education authorities through the back door and, as a result, education has suffered."
In authorities where 1 per cent savings were applied to education, it had a varying impact. In Carmarthenshire it left a pound;900,000 hole in the delegated school budget. A further pound;165,000 was lost from the non-delegated fund - the part of the education pot controlled by the LEA and used for services such as school transport.
Wrexham applied cuts of 1 per cent and the chief education officer was told to find a 2 per cent - pound;1m - saving from next year's budget. This was later reduced to 0.5 per cent after talk of a four-day week in some schools.
Flintshire, which has the lowest spending in Wales per pupil, protected education from the cuts.
At last month's meeting of the education and lifelong learning committee, minister Jane Davidson reported around half of local authorities had not put savings back into frontline services.
But committee chairman Peter Black said: "The 1 per cent is taken off before the authorities get it. The Assembly government says these savings are there to be reinvested but because it's holding on to the money the authorities are forced to make cuts instead."
An Assembly spokesman said it would not regard an imposed cut in a school's budget "as evidence of a planned efficiency gain". He added: "All parts of the public sector are expected to achieve annual efficiency gains of 1 per cent."
The Welsh Local Government Association said schools will be "heavily involved" in budgetary decisions via local budget forums.