The Council of the Isles of Scilly buys in all its post-16 education - something the Government is in favour of. Before incorporation and the formation of the Further Education Funding Council, the Isles the country's second smallest education authority received an allowance for further education.
Now the FEFC pays that money direct to colleges on the mainland, leaving the islands to meet the cost of transport and lodgings for all students who opt to do A-levels or vocational qualifications.
To rub salt in the wound, the islands' traditionally high standards in education are making the financial penalty heavier. The one secondary school, Isles of Scilly comprehensive on St Mary's, topped GCSE league tables last year. All the 25 pupils went on to post-16 education, leaving the council with a Pounds 60,000 annual bill.
Philip Hygate, chief executive, said: "Education on the islands is valued very highly. We had the first compulsory system in 1834, long before anywhere on the mainland. It has meant educational success for children through all classes on the islands, despite a large part of the school population fitting criteria that would be defined as disadvantaged."
Under what is almost a voucher system, Isles of Scilly students are allowed to go to any post-16 institution in the country - not necessarily the nearest on the mainland. This academic year they have opted for courses as far away as Shropshire, Hampshire and the Isle of Wight. A third, whose parents top up their council grant, go to independent schools' sixth forms. The rest are split equally between A-levels and vocational courses.
Mr Hygate said: "We have a unique problem and the funding that we previously received has been lost, but the costs are still the same. We are delighted that the islands' children are doing so well and want to get on. But in economic terms we are being disadvantaged."
As well as boarding costs, the council pays for train journeys back to the islands for major holidays. Many children are already used to going to school by boat. Secondary pupils from the four other inhabited islands are sent to St Mary's comprehensive, though they all have their own primaries except Bryher.
Barry Archer, council treasurer, said the Government already recognised the higher cost for education up to 16 in its standard spending assessment (the figure the Government believes a council needs to provide a standard level of services comparable with other authorities). But he hoped ministers would improve the Isles of Scilly's weighting formula to accomm-odate the extra costs it has to meet.
He said: "The amount is sizeable for an LEA with only 1,000 properties for council tax. It is more than we spent on our tourism board or planning. At present it has to be found from other services or at the expense of other areas in the education budget."
* The City of London is the country's smallest LEA. It administers one primary school and one hospital education unit.