During the past two years, Education Secretary David Blunkett and his team have made known their hatred of the mechanism of local authority funding of schools, particularly the Education Standard Spending Assessment (ESSA). There has been talk of a new “needs-based” approach and a possible national funding formula for schools.

Yet at the same time, the Government has not come through with its much-trumpeted changes; in fact, it has frozen change for three years as research is carried out into the way money is allocated to local authorities from the centre - the Revenue Support Grant (RSG).

The present system is not fair and does not work. It is hard to justify the wide range of expenditure per pupil between different authorities and regions (see box).

The SSA mechanism fails in its legitimate purpose of making fair adjustments for genuine additional needs and costs in different areas, even though its main factors (listed right) are fair enough. These factors influence each of the five “sub-blocks” making up the final Education SSA : primary, secondary, post-16, under-five and “other”.

What matters on the ground, to you and me as school governors, is whether a particular authority is a “winner” or a “loser”. This result is heavily dependent on allocated weightings for the various factors:

* Additional education needs (AEN) -takes account of the proportion of lone-parent families, those on income support, and those of certain ethnic origins.

* Sparsity - reflects the population spread with additional transport costs and more small schools (often defined as more sheep than pupils!)

* Free school meals

* Area cost adjustment (ACA), a multiplier which should reflect local variations in pay, costs and so on.

* Funding complications such as whether pupils live within the LEA or outside it.

* The “scaling factor” - a statistical device to adjust figures within each of the “sub-blocks” of education so that they match the money available.

There must be a simpler way of getting a fairer answer!

It is just not good enough for either central government or the Local Government Association to duck the issue and perpetuate such inequalities for three years more of “in-depth research”. Neither can the do-nothing advocates hide behind the excuse that any change will produce “winners and losers”; such procrastination only ensures that those who are losing will go on losing for at least another three years.

Some cynical governors have quipped that such a standstill takes us beyond the next general election and that the refusal to go ahead with some well-justified interim changes had more to do with the looming election of a London mayor than with a desire for really fair funding.

Given the reluctance of central government to do more than tinker with their proposals, even after extensive consultation, governing bodies need to decide what can be done now.

Here are four suggestions:

First, if we really must wait three years for vital corrections to the SSA methodology, there is an even greater need to ensure that money from the Government’s Standards Fund and other specific grants is fairly distributed.

Second, serious consideration should be given to switching to a needs-based national funding formula to distribute the money.

Third, those local authorities that need to do so, and particularly those that are spending less on education than their current SSA, should be allowed to exceed the level of total expenditure implied by Deputy Prime Minister John Prescott’s unofficial capping guidelines.

These confine authority increases for 19992000 to the agreed total standard spending assessments or to a level that does not produce more than 4.5 per cent increase on the council tax.

Fourth, governing bodies, through such associations as the representative National Governors’ Council, should be involved in the proposed review with the Local Government Association.

Labour’s Fair Funding reform ought to be carried to its logical conclusion. That will require much more than tinkering with local formulas; it will probably require more than that valuable pound;19 billion extra over three years for which the Secretary of State has fought so hard.

Schools need a system that is equitable, simple, transparent. They deserve to be backed each year with sufficient central funding. Only thus can governing bodies deliver improved standards, the core of our joint endeavours.

Jack Morrish expresses a personal view. Until recently he was an executive member of the National Governors’ Council. He is now a governor at a Somerset middle school

EXPENDITURE PER PUPIL 199899

Primary Secondary

Inner London 2,129 to 2,707 2,313 to 3,632

Outer London 1,775 to 2,138 2,430 to 2,945

Met districts 1,571 to 1,858 2,046 to 2,508

Unitary authorities 1,543 to 1,928 2,202 to 2,655

Shire counties 1,546 to 1,844 2,103 to 2,731

All-England 1,543 to 2,707 2,046 to 3,632

Source: Cipfa figures, based on LEA estimates. Some of this divergence is due to accounting practices and local funding decisions. From next year an improved return based on the 1997 Act willensure a more rigorous commonality.