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Parish tax plugs holes in hard-hit budgets

A parish council is pioneering the use of a legal loophole to avoid government spending caps and help fund cash-strapped local schools.

The public outcry at education cuts in Frome, Somerset, has led the town's councillors to use power, given to parish councils under Section 137 of the Local Government Act 1972, to help nine schools.

Liberal-Democrat-controlled Somerset County Council, which has been hit by local authority capping regulations, has slashed its education budget by Pounds 12.5 million, or 7 per cent, after the Government's refusal to fund fully the teachers' national 2.7 per cent pay award. This week more than 100 teachers in the county were warned that they will be made redundant to help reduce its spending.

In Frome, which has 23,500 inhabitants, spending on education has been cut by Pounds 400,000. The town council has agreed to fund projects totalling more than Pounds 15,000. The money will help to fund supply teachers covering for staff taking pupils abroad, swimming trips, science and computer equipment for the national curriculum, and play equipment. The schools put in 19 bids to the council, totalling more than Pounds 100, 000.

The council usually raises money under Section 137 to help local voluntary groups and to build up its reserves. But this year it is using some of this cash to help local schools. Money raised in this way is not subject to local authority capping.

Other parish councils look likely to follow Frome's lead. In Gloucestershire, which is Labour and Liberal Democrat-controlled and also subject to capping, the village of Toddington is considering using Section 137 to help fund its primary school, which is having to lay off a welfare assistant.

John Clark, the secretary of the National Association of Local Councils, said: "I think it's highly likely that more and more local councils will use Section 137. They feel very sensitive about local schools. The councils I know that are using the measure are doing so as a direct result of education cuts this year."

John Birkett-Smith, the mayor of Frome, said: "The town council is aware of the importance of education; if we neglect it, we neglect our future. But education should be the responsibility of the Government and the county council."

Under Section 137, council tax bills in any parish could only go up by at most Pounds 3.50 per head, so there is a clear limit to how much parish councils can aid schools.

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