Councils blame a combination of Treasury-imposed efficiency savings, the potential impact of equal pay and single status agreements, and falling school rolls.

Glasgow officials are looking at a 2 per cent cut for 2005-06, and at least another 2 per cent per cent for 2006-07 - equivalent to pound;8 million each year.

Bruce Robertson, director of education for Highland, said he was looking at “by far the most difficult budget we have been asked to bring in since the early days of local government reorganisation”.

The biggest single pressure was spiralling energy costs, which had risen by pound;2.7 million in the past two years. “We are trying to avoid front-line cuts,” Mr Robertson said, although he acknowledged that there would inevitably be an impact on school budgets.

“It does mean that we will be freezing the replacement of non-front-line posts such as administrative and clerical staff in other parts of the service,” Mr Robertson said.

Privately, other authorities are expressing similar fears. With teachers’

salaries making up by far the largest part of their education budgets, there is little fat to trim to meet efficiency savings of around 2 per cent.

Roy Jobson, outgoing president of the Association of Directors of Education in Scotland, told his annual conference last week in Cardrona: “We are going to face a very difficult year or two with resources. The whole notion of efficiency savings, and equal pay and single status, is going to cause quite a crisis for us. If we combine that with the decrease in the school population, some of us have got our work cut out over the next few years.”

Ronnie O’Connor, the new ADES president and Glasgow’s executive director (education, training and young people), repeated the warning of turbulent financial waters ahead.

But Mr O’Connor is not wholly pessimistic. “Although financially painful in the short term, there are opportunities to re-evaluate job families and job remits to deliver a more holistic approach to young people and their families across services and across agencies,” he said.

Mr O’Connor described “emerging tensions” between the demands of different ministers. The Education Minister wanted a “highly devolved system of school finances and more devolution of council resources to schools, along with greater autonomy for the deployment of those resources by schools”.

The Finance Minister, on the other hand, was leading a drive for efficiencies from “highly centralised systems of procurement and commissioning services”.

Meanwhile, as revealed in The TES Scotland (November 4), there is some good news for the cities following agreement within the Convention of Scottish Local Authorities over the distribution of the Scottish Executive’s extra funding to increase the teaching workforce to 53,000 by 2007.

The TESS has learnt that the final formula is to be 80 per cent based on the normal pattern of grant support (the Executive’s grant-aided expenditure, or GAE), with 18 per cent going to areas of greatest deprivation and 2 per cent for “super-sparcity”. This will be confirmed in a circular.

Areas such as Glasgow, North Lanarkshire and West Dunbartonshire should receive proportionately higher funding as more teachers are targeted at the poorest areas in each authority. Glasgow, it is understood, would receive funding for an additional 100 teachers, while Edinburgh will receive funding for only two.

Peter Peacock, Education Minister, told the ADES conference: “The priority is how to target more money to those communities in Scotland who are in greatest need and how do we turn around the chronically poor school performance in some of our most deprived areas?”

While the new formula is expected to be treated as a one-off by Cosla, there are hints that it may be a precursor for future moves to depart from straight GAE settlements which are seen as insufficiently sophisticated to take into account a range of factors.

Ewan Aitken, Cosla’s education spokesperson, said: “We have had long discussions with the Executive about this. The introduction of super-scarcity was a bit of a surprise although, in any distribution mechanism, there will be winners and losers. But we do need to get more sophisticated.”

Mr Peacock repeated his warning to directors that they should be recruiting more teachers to help the Executive reach its target. Teacher workforce numbers were ring-fenced from local government efficiency savings, he said.

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