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Guarantee is welcome - but is it enough?

The announcement of a minimum funding guarantee for all schools ought to be a reason for rejoicing. Any effort to bring certainty to the wild world of education finance is surely a step in the right direction. But, as ever, ministers' honeyed words must be read with care. The answer is in the detail and the detail is, as always, complex.

The Government's interests and those of every individual school are closely aligned. Because education is only a part of a wider, fiendishly complex, system of local government finance, any guaranteed funding for schools affects other council funding. Put simply, the more Mr Clarke gets the less there is for social services, firemen, highways and the local environment.

What Mr Clarke appears to have done is to guarantee a minimum 4 per cent rise per pupil for schools whose pupil numbers are static. If numbers are rising, they will get less. Growing schools will get at least 3.4 per cent (on average) for all pupils. If numbers are falling, they may get over 4 per cent, though Mr Clarke did not say how much. Thus, even schools with falling rolls could end up with a higher budget for 200405.

Councils will be forced to pass on extra cash from Whitehall intended for schools and their spending on central education costs will be limited.

The overall effect of these decisions will lead to significant pressures on some local authorities. They will be able to bid for different kinds of targeted funding to help them meet the Government's guarantees to schools.

There is even the novelty of the Government stating that grants could be brought forward from future years into 200405.

The risk for the Government is at least two-fold. First, schools' costs may rise by more than the 3.4 per cent the DfES predicts. If this happens, a 4 per cent rise will be inadequate. Second, the fact that schools can get extra money by showing the DfES that they have what Mr Clarke described as "compelling arguments" for extra help will surely ensure that most authorities rouse their schools into an apoplexy of complaint.

The Government has probably done as well as it could to stitch together a better deal this year. We must await next year's LEA schools' budgets to see if it has been successful. Mr Clarke is not out of the woods yet.

Tony Travers is director of the Greater London group at the London School of Economics

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