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MPs defied over Pounds 40m bonus for GM schools

Grant-maintained schools will have received bonuses of at least Pounds 40 million by 1999 in the teeth of vigorous protests from the Commons public accounts committee and at a time when many local authority schools face huge cuts.

Education ministers have ignored warnings from MPs on the public-spending watchdog about unacceptable payments to opted-out schools. They have given an additional 81 GM heads money to compensate twice over for the loss of local authority services. A further 70 schools have had the amount they receive increased.

Financial rules for opted-out schools mean that many are in effect paid twice for services they previously received from their local authorities.

Last year the public accounts committee was told that GM schools had received an extra Pounds 13.6 million. The Department for Education has now told the committee that this is to rise by a further Pounds 26.2 million to cover up to 1999.

By 1999 the London Oratory, the school chosen by the Labour leader Tony Blair and his wife for their eldest son, and the Raines Foundation in Tower Hamlets will have received double funding amounting to more than Pounds 1 million between them. Four more schools will each get Pounds 400,000-plus and seven others receive in excess of Pounds 300,000.

The move, in defiance of complaints from the public accounts committee, is likely to fuel the unrest among local authority schools which are having to make severe cuts. The GM cash would come from LEA budgets.

In Gloucestershire, 11 of the 12 GM primary schools have received a total of over Pounds 136,000 for the first time. The 12th primary has had its extra cash increased by more than Pounds 5,000. The authority has already cut Pounds 8 million from education and is waiting to hear whether ministers will approve its application to spend over its limit.

Last year ministers pre-empted the committee by announcing plans to phase out double funding within four years. The committee subsequently demanded that it stop in two years. But it now appears the cash payments will continue until 1999, one year more than promised.

Alan Williams, Labour MP for Swansea West and a member of the committee, said: "The PAC denounced this as unacceptable but the Government decided it was far more important to ensure that no GM school flops on its face before the next election and that it is far more important to provide that protection than to have equitable funding. These GM schools are islands of plenty in an ocean of cash-starved schools."

The sums ministers guaranteed GM schools are being reduced year by year from Pounds 12 million last year to Pounds 466,000 in 1998-9. However, the local authority-funded Local Schools Information said the final total could be more than Pounds 60 million as the DFE's statistics do not include the 17 local authorities on the Common Funding Formula which is being introduced in areas where there are large numbers of GM schools.

Martin Rogers, the LSI's spokesman, said: "It is extraordinary that this money is coming into some schools for the first time at a time when it is supposed to be being phased out. It is a bung at the expense of local authority schools and if councillors did this sort of thing with public money they would be surcharged."

The public accounts committee has yet to produce its final report on the financing of GM schools. The DFE said ministers would consider any recommendations it made.

Gillian Shephard is trying to raise an additional Pounds 1billion for schools next year but right-wing ministers are already understood to be joining forces with the Treasury to resist the Education Secretary's demands.

* Researchers at Warwick University this week claimed that the feel-good factor in GM schools arose largely from the extra money spent on buildings, equipment, services and support staff.

The feel-bad factor, they said after surveying teachers in 211 opted-out school for the National Union of Teachers, came from lack of contact with colleagues elsewhere and job insecurity.

A survey for the Grant-Maintained Schools Foundation last week said that every aspect of school life had been improved.

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