The Government's White Paper promised next month will include proposals for extending local management which could lead to bitter arguments between heads and local education authorities over whether sufficient money is currently delegated to schools.
At the heart of the debate will be the question of whether councils should be forced to delegate areas such as library services and peripatetic music tuition even where schools have indicated that they would prefer such services to be provided centrally. Ministers are also considering a redefinition of the potential schools budget (see panel, below) and examining whether capital spending might be delegated to schools. Post-16 funding could also be adjusted to bring money schools receive for sixth-form courses into line with the formula used to fund further education colleges.
Most attention is expected to focus on LEA advisory services, peripatetic tuition, library services, outdoor activity centres and administrative services, which some authorities delegate but others do not. Many LEAs which do delegate then recoup the money by selling these services to schools.
Figures for 1995-96 show that just three out of 109 local authorities in England did not retain central expenditure for advisory services; 25 authorities did not fund peripatetic music and non-special needs tuition centrally, 34 did not spend centrally on library services and 35 had no central budget for outdoor activities.
A spokeswoman for the Department for Education and Employment said the fact that a local authority did not hold central expenditure for a service usually meant that all funds for that service were delegated, but in some cases there had never been any service provided. Many LEAs had partially delegated the funds for these services. Legal, personnel and payroll services are lumped together as "management and information". All LEAs delegate some money from this category, but at present no council delegates it entirely, said the DFEE.
Peter Johnson, vice-chair of the Secondary Heads Association's school and college funding committee, does not expect an outcry if councils are told they must delegate more services. "LEAs have got their act together and are aware of the need to give a quality service to schools," he said. "The culture has changed from one of control to one of support."
Mr Johnson, head of Wallasey School in Wirral, Merseyside, believed that secondary heads would welcome the opportunity to decide whether they bought in services from the local authority or elsewhere. "Many heads would buy back from their existing authority, but they would like to be given the choice."
Heather du Quesnay, president of the Society of Education Officers, said many authorities already sought agreement with heads and governors over the extent of delegation. "It's very much the result of local debate and reflects local tradition over the delivery of services."
And Alan Parker, education officer for the Association of Metropolitan Authorities, said it was wrong to force the hand of LEAs if schools had not indicated that they wanted a service to be delegated. "Once you delegate, you have to persuade everybody to buy the service back to keep it going," he said. "If some don't buy it, you have to cut back . . . it finally disappears. "
The percentage of potential schools budget delegated by individual LEAs ranges between 95.8 per cent in Dudley and 85.1 per cent in the Isles of Scilly. Where councils had tried to delegate as much money as possible, said Mr Parker, there were indications that some schools did not like the results. "There is actually a change in attitude on the part of schools. What they want is more money, not necessarily more delegation."
Quentin Thompson, a partner at Coopers and Lybrand education and training consultancy, confirmed that some authorities still have the capacity to increase the percentage of the PSB which is delegated to schools.
But the Government should be wary of increasing the services which must be delegated without trying to discover the views of heads. "Schools have now had local management for five or six years and heads are much more informed than they used to be," he said. "It does not make much sense to have things delegated to people who don't want to receive them."
Mr Thompson, whose company carried out the first Government-funded study into LMS in 1988, said next month's White Paper must also take a coherent view of the role of councils. This should include looking at how services provided by LEAs affect other council services. "Some of these items are very difficult to disentangle," he added.
Discussions over the possible inclusion of capital spending in LMS will highlight what LEA schools see as a major disparity in the way they are treated compared with grant-maintained schools. "Most LEA schools feel they have been hard-done-by in not being able to gain access to the same level of capital funding," said Peter Johnson.
Under a scheme run by the Funding Agency for Schools, GM schools get Pounds 12,000 plus Pounds 24 per pupil for capital projects. All schools are given a minimum of Pounds 17,000 and money can be carried forward to subsequent years. Bids may also be made to receive a year's funding in advance.
Council leaders believe it would be impractical to split the relatively small capital sums allocated to local authorities equally among schools. The schools would need time to build up reserves prior to delegation, said Heather du Quesnay. "Capital spending can arise suddenly because of a burst boiler, for example. It's very difficult for an individual school to budget for emergencies."
Earlier this year, the House of Commons education committee called for post-16 courses in schools and colleges to be funded on a common basis. MPs did not recommend extending the Further Education Funding Council's methodology to all post-16 institutions because they did not have time to study it in sufficient detail.
A DFEE study published in December found little difference in the cost of funding A-level students in school sixth forms and FE colleges, although college principals frequently claim that sixth forms receive preferential treatment and are therefore more expensive.
Peter Johnson claimed schools would be very concerned if sixth forms were faced with the same funding regime as the further education sector. "The FEFC has exerted pressure each year for colleges to increase their number of students, but on reduced funding," he said.
POTENTIAL SCHOOLS BUDGET
* The general schools budget is the total amount an authority spends on its schools and services for schools. It includes the money delegated to governing bodies as well as items such as interest on borrowing for capital works, school meals, home-to-school transport. It does not include pupil referral units or nursery schools or certain charges for central administration.
* The potential schools budget is broadly that part of the general schools budget that a local authority could delegate to governing bodies. It does not include capital, central Government grants, educational psychology or welfare services, school meals or home-to-school transport. Most LEAs also choose to hold part of the PSB back for certain central services including authority-run school library, music, advisory and learning support services. Authorities are required to delegate at least 85 per cent of the PSB and the average level ofdelegation is 90 per cent.
* The Government could alter this by changing the percentage of the PSB that must be delegated or altering the list of discretionary items so as to redefine the PSB.