Grants for school improvement may not come in 57 varieties but for headteachers trying to top up their schools’ core budgets it sometimes feels that way. It isn’t the idea of funding being targeted at particular initiatives that heads object to so much as the strings attached to the different grants and the paperwork they generate.

“The biggest problem is trying to work within the requirements for each scheme, and sometimes those conflict with each other and the whole thing becomes incredibly complicated,” says Mike Griffiths, head of Deacon’s school in Peterborough.

As a specialist technology college that also has leading-edge and training-school status, Deacon’s draws on a host of funding streams that run well into double figures. That is not unusual, especially for larger secondaries. So government plans to cut the number of standards-related grants and the red tape that goes with them have been broadly welcomed by headteachers.

From April 2006, most of the payments that are designed to support school improvement and innovation will be combined in a single standards grant. In a consultation document published last month the Government said that there would be fewer conditions and reporting requirements attached to the cash, which schools will be free to spend on their own improvement priorities.

“It means we are not going to be wasting bursars’ time on creative accounting to make sure that the grant for books is covered by books and the grant for information technology is covered by IT. The school decides its priorities and provided they broadly fit in with what this grant is intended for then there is a simplification there which is a good thing,” says George Phipson, funding consultant for the National Association of Head Teachers and general secretary of the Association of Heads of Foundation and Aided Schools.

Part of a package of funding reforms that will also introduce three-year budgets for all maintained schools, the new grant will absorb most of the funding streams that at the moment come under the standards fund umbrella.

These include the current school standards grant, funding for specialist schools and for schemes that are managed by LEA partnerships or groups of schools, such as Excellence in Cities and the behaviour improvement programme. Targeted grants for schools that are “failing” or causing concern will remain separate, as will the ethnic-minority achievement grant, money for piloting new initiatives and a few other funding streams that need to be focused at specific schools rather than distributed more widely.

Lindsey Wharmby, funding consultant for the Secondary Heads Association, describes the single standards grant as a step in the right direction that will reduce bureaucracy at school level.

But Mrs Wharmby won’t be giving the single standards grant her full endorsement until she sees the details of the formula that will be used to distribute it. The Department for Education and Skills plans to introduce the new grant in two stages. In 2006-7 and 2007-8 existing standards fund grants will be brought into the new grant without any changes to the way they are distributed. A single new formula will then be introduced in April 2008. Although the details have not yet been worked out, the formula will be based on a flat rate for all schools - which will protect smaller ones - plus an extra amount per pupil, with a weighting for social deprivation.

“This avoids the problem with the present grants, which work on cliff-edge changeovers, where if you get another pupil, you suddenly get an extra Pounds 10,000,” says Mr Phipson.

A national formula will also help schools predict how much money they are going to get each year, and ties in with the introduction of three-year budgets.

Some things will remain unchanged under the new regime. The DfES proposes to let education authorities continue to hold back as much money from the single standards grant as they do under current arrangements to co-ordinate programmes such as Excellence in Cities. Schools will also be able to agree, through their schools forums, to increase the money held back to support co-ordination and collaboration. But it seems unlikely that many will want to do this.

“As this rolls out from year to year and forums become more confident, then I would expect the retained element to go down, even though there is the facility for it to go up,” says Mr Phipson.

Headteachers seem more concerned about how much money the Government is going to put into the new grant than how much LEAs will hold back.

Jack Hatch, head of St Bede’s Church of England primary school in Bolton and a member of the NAHT’s national council, says that in simplifying standards-related funding the DfES has shown that it has been listening to school leaders. But he adds: “The huge danger in bringing all these things under one umbrella and giving it one title is that some money will leak out.”

An even bigger danger, perhaps, is that having streamlined the funding system, education ministers just won’t be able to leave well alone. If they continue to announce a new initiative every week, with a pot of money to implement it, schools could soon find themselves drowning once more in as many funding streams as there are varieties of Heinz soup.