The fact that the Conservative party is apparently considering such a radical proposal for its election manifesto raises a number of questions. Does the Government want to centralise funding decisions so that all schools become self-governing? Or is it urging all schools to become grant maintained so that it can wrest control from local authorities?
It is difficult to see how making all schools do anything fits in with a policy of choice and diversity. So the suspicion must be that it has more to do with the other declared Government aim of driving down public expenditure. Part of the anticipated saving would presumably be the Pounds 600 million a year local authorities spend on schools above what the Government says they should.
The Government is not alone in thinking it should play a more transparent part in the public funding of schools. The House of Commons select committee on education and the School Teachers' Review Body have both called for an end to the present "funding fog" to make it clearer that what the Government says it has put in at one end of the system does indeed appear at the other end in school budgets.
Heads of GM schools make no secret of their desire to move quickly to national funding. And the Secondary Heads Association, appalled by conspicuous differences in the incomes of similar schools in neighbouring authorities, has also argued for a fairer slicing of the national cake.
But there are principled and practical objections to centralised funding arrangements for schools. Neither the Government's exasperation with local government nor this proposed solution are new. Central funding of schools was suggested in the mid-Eighties as an alternative to the poll tax. The judgment made at the time on which was the lesser of two evils may even have been the right one.
The principle involved is that of local democracy. Since resources are finite and expectations differ, local communities should have the right to decide through democratically-elected councillors their own values and priorities for local public services. In recognition of that, national funding of local government comes as a single lump sum that is not earmarked. So local authorities can give greater or lesser priority to particular services, and within education may order the funding of primary and secondary schools, special needs, music or libraries, subject only to meeting their statutory obligations and being locally accountable.
At least, that was the theory. Capping limits on spending, enforced delegation to schools, opting out and the unelected quangoes have all modified local democracy. And taking away all responsibility for schools would remove it altogether from education with a number of practical results which, though not all bad, must give cause for careful reflection.
For a start, financial cause and effect would become much clearer. If a future government agreed a national pay rise for teachers of 2 per cent and put only 1 per cent into directly-funded school budgets, the responsibility for the ensuing redundancies and bigger classes would be apparent to all. There would be no scope for blaming local bureaucracies or hiding the shortfall behind a fog of disputed figures.
A government which directly funds schools will also find itself responsible for the differential between primary and secondary schools; calculations about class sizes, curriculum breadth, social disadvantage and special needs. Decisions for which again the Government would then have to answer, even if it employed, for example, the Funding Agency for Schools to carry out the paperwork.
A fairer national formula sounds attractive to schools funded below the average; for those above it could mean cuts of up to 20 per cent unless extra money were found for levelling up. Schools might share the money local authorities held back, but would also need to buy the services that would disappear with them, probably at greater cost.
Eliminating education authorities altogether would leave a number of awkward but unavoidable practical jobs to be done: ensuring every child had a school place; arbitrating on admissions appeals; protecting those with special needs; auditing schools' spending; promoting standards; finding, training and advising governors. Again, the cost of agencies to do such work would eat into supposed savings.
The tradition of a locally-administered education service runs strong in Britain and is seen as providing important checks and balances that do not exist in all countries. Given that all schools are now locally managed, it may be time to consider whether local education authorities should be replaced by governing bodies and more democratically constructed funding agencies. But constitutional change demands sober debate and consensus; the last thing that putting it into an election manifesto will produce.