The McCrone agreement has begun to unravel at the edges with the first signs of budget pressure in local authorities. In Dundee, which is axing just over pound;1 million from its package, teacher leaders have accused the city of “welching”.

Our survey of councils across Scotland has revealed, as council leaders forecast last month, an acute shortage of funds to implement key aspects such as extra support staff, professional development and the new deal for probationers.

Teachers will receive 4 per cent and 3.5 per cent rises within the coming financial year but there will be little left for other fundamental parts of the deal. Phased aspects will take longer than projected.

Alan Blackie, president of the Association of Directors of Education in Scotland, admitted: “The full implementation of the national agreement is now in jeopardy. It’s a five-year programme and we are about to enter year two and there are some major challenges across the country. The financial package is tight everywhere and that is particularly so in some councils. The spirit of the agreement might be undermined because it’s a knife-edge in some authorities.”

Mr Blackie, director in East Lothian, fears that plans to release more classroom time for teachers by employing a range of support staff are at serious risk, along with the expansion of continuing professional development.

He is urging the Scottish Executive to continue talks with the authorities over the full McCrone implementation. But the Executive has already rejected an appeal from the Convention of Scottish Local Authorities for an extra pound;43 million, pointing out that council leaders signed up to the deal knowing they would have to come up with it from their own resources.

Dundee is among the hardest hit, at pound;1.6 million short for the full McCrone package. Councillors last week saved pound;1 million by accepting there will be no extra support staff and slashing the CPD allocation by half. That prompted Eric Baillie, Educational Institute of Scotland representative on the education committee, to accuse the city of reneging.

Mr Baillie anticipates a similar situation next year. “Agreements count both ways,” he warned.

Elsewhere, Argyll and Bute says it is pound;2.3 million short for McCrone over the first three years and will have little room to pay for extras once teacher salaries are accounted for. Clackmannanshire is raiding other budgets to ensure it has funds for fresh McCrone demands.

Across in Fife, there is a pound;1 million gap in McCrone funding. “We will have to phase things over a slightly longer period,” Alex McKay, education director, said.

In Shetland, Malcolm Payton, head of education, said the authority was around pound;700,000 short, making it difficult to employ the extra support staff to reduce teachers’ workload. “We’ll be unable to implement all the provisions.”

Our survey indicates average education budget rises for 2002-2003 of around 9 per cent, most of which is swallowed up by pay rises for teachers and support staff and is, as one assistant director put it, “a virtual increase”. Some of the increase is tied up in pre-five grant and other ring-fenced initiatives.

However, it appears more money is going into front-line school budgets than for several years, despite the smoke and mirrors exercises in local authority finance departments. Council leaders have accepted the Prime Minister’s 3E mantra and backed education at the expense of other services.

There are substantially fewer cuts than in recent years and in several authorities none at all on the school side. Another depute director spoke of a “massive turnaround” in the last few years with very few complaints from headteachers about the amount of money they were receiving, particularly as the Chancellor’s extra cash had bailed out hard-pressed school budgets.

“There is no question that since the Scottish Parliament the situation has improved with additional support staff in primaries and smaller class sizes,” he said.

Others are less convinced and speak of further pressures on special educational needs and school transport that are almost impossible to meet. At the same time, officials complain of hypothecated drip-fed cash from central government that leaves finance chiefs confused and unable to plan properly.

Critics, however, believe the confusion allows anti-education forces to siphon off funds to other priorities now that more comes schools’ way from the Executive. Tensions between central and local government remain a permanent feature of the financial landscape.

Leader, page 22