The Local Government Association says this year’s council settlement means even the least well-funded authorities will get an inflation-level or above increase in their standard spending assessments (SSA) for education.

But the Government’s decision not to change how the money is shared between authorities has surprised some.

London boroughs had feared proposed changes would cost them millions of pounds as cash was shifted to northern councils. Instead, ministers have imposed a three-year freeze while they try to hammer out an alternative to the current arrangements.

Stephen Lord, the LGA’s head of grants distribution, welcomed the settlement. “The overall increases and specifically those for education and personal social services are substantially above those of previous years when substantial numbers of authorities faced year-on-year reductions,” he said.

“One of the big unknowns is the teachers’ pay settlement, and there is a 1 per cent hang-over from the previous year. Nevertheless, it implies a 3 per cent increase in real terms - which is pretty dramatic.”

According to his analysis of the figures, there has been a marginal shift in funding away from London and the South-east towards the North due to changes in the way children’s social services are funded, not education.

But he was surprised at the Government’s decision not to amend the funding formulas affecting education, which take into account deprivation factors such as low income and single parents.

Dave Wilcox, LGA deputy education chairman and a spokesman for less well-funded education authorities, claimed Labour had “bottled” the chance to make significant changes - despite this year having more money available to smooth over the transition.

He calculates that South Gloucestershire will get Pounds 2,115 per primary pupil next year - compared to Pounds 2,740 in Slough.

“No one can tell me there is a Pounds 625 difference between the cost of teachers in Slough and South Gloucestershire - they are next door to each other,” he said.