Capital schools fear loss of #163;200m

Up to #163;200 million could be wiped off London education budgets by Government plans to recalculate the way cash is allocated to councils.

The move - part of a more extensive bid by ministers to redistribute some #163;400m from London to councils elsewhere - would have a devastating effect.

The capital's boroughs are currently compensated for their higher-than-average numbers of children with lone parents, families on income support, and schools' ethnic diversity .

In Hammersmith and Fulham, for instance, pupils speak 118 languages, 102 are spoken in Harrow and more than 100 in Islington.

Ministers believe the present funding arrangements are unfair and want to change three key elements:

* the area cost adjustment which compensates for the higher costs of wages and other bills ;

* the additional educational needs index, which helps meet the cost of pupils in special schools and with other needs;

* the children's personal social services standard spending assessment, which provides support for children at risk or in need.

In all three categories, London has at least twice the national average amount of cash.

But the Association of London Government wants to allow time for a much more rigorous analysis before changes are introduced.

Councillors have warned Hilary Armstrong, the local government minister, that the changes would be severely damaging. They claim that overall London could lose between 6-7 per cent - the equivalent of #163;200m.

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