Government spending on schools could take account of the test results of five, seven and 11-year-olds, according to a report from education consultants Coopers Lybrand for the National Union of Teachers.

The report suggests scrapping the indicators of deprivation used in the calculation of the education part of the central Government grant to local councils. In their place, it proposes that the Government calculate the additional educational needs part of the grant using an estimate of the proportion of pupils scoring below average in national curriculum tests.

The current grant figures take into account the proportion of lone parents, numbers on income support and ethnicity. According to Coopers Lybrand, only the number of families on income support can be directly linked to education deprivation. More accurate measures, says the report, are the proportion of pupils for whom English is an additional language and the results of baseline testing of five-year-olds.

The report suggests that the new criteria could take into account the estimated number of pupils who fall into the lowest 15 per cent of attainers. The calculations could be made based on assessments of children when they start school and on test results at seven, 11 and 14.

More radically, the report suggests an overhaul of the basis for calculating the standard spending assessment. The Government could calculate the amount of money schools require to deliver the national curriculum. Any formula would take into account the size of classes and amount of teacher time.

The report acknowledges that the level of such funding might be more than the Government was prepared to provide. Ministers, however, would have to ensure that their expectations of schools were in line with funding assumptions.

It points out that the Government already effectively decides the level of spending on education by penalising authorities that exceed the capping limit.

The report says: ”[The] Government has already grasped the nettle: it has claimed that it can judge what authorities should spend in absolute terms. ”

An example of the activity-based model favoured by Coopers Lybrand assumes an average class size of 13 for five to seven-year-olds, rising to classes of 25 for 14-year-olds. Teacher salaries are the major factor in the formula.

Doug McAvoy, NUT general secretary, said the report will challenge the Government to cost its initiatives.

The Funding of Education by Coopers Lybrand is available from the NUT, Hamilton House, Mabledon Place, London WC1H 9BD.