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One man's ceiling is another's floor

Funding for schools could be a problem for at least another two years, Phil Revell reports

Can headteachers hope for an early solution to the funding problems that have caused them so much anguish in the past month?

At least one expert says not. "Anybody who thinks that this year's problems are a one-off is living in Cloud-cuckoo-land," says George Phipson, who advises the National Association of Head Teachers on funding.

Most of the elements that contributed to this year's debacle will be around for the next two years. The prime factor was the reorganisation of local government funding that changed the national distribution formula, creating winners and losers and distorting the effect of the pound;2.7 billion increase in education grant.

Deputy Prime Minister John Prescott has ordered an inquiry into what went wrong but major change is unlikely.

The current formula was introduced only last year, after four years of reports and negotiations. For the next two years the effects of the 2002 changes will be reduced by artificial floors and ceilings.

The losers, areas where funding has been seen as generous in the past, mainly in the South-east, will receive at least 3.2 per cent. The winners are limited by a ceiling of 7 per cent.

George Phipson points out that more than pound;800 million of protected performance-related-pay money will be transferred to the general schools pot over the next two years. But the funding ceilings will result in some schools missing out. He claims that the money to support this year's workload agreement is equally at risk.

Schools will also face further changes to the standards fund, as grants associated with early years, numeracy and the key stage 3 strategy come to an end. "No one is convinced that they (the Government) have the numbers right on these issues," he said.

The TES spoke to one expert, however, who was suspicious of the motives of those shouting loudest. The changes had created problems, he said, but adjustments to national insurance, pensions and the standards fund had been well signposted. "We should be looking at the money that hasn't been spent before we demand that the Government goes to the taxpayer for more," he said.

The National Association of Schoolmasters Union of Women Teachers claims more than pound;1bn of unallocated cash is sitting in school bank accounts. In theory, local authorities could give this money to schools in financial difficulties. In practice, "it's a non-starter," said one local education authority officer. "No LEA has used this power since it became available last year."

Heads can at least be sure that two changes will not be repeated. The Treasury says that it has "no plans" to increase national insurance, and this year's exceptional increases in employers' pensions contributions (see below) will not be repeated.

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