With next year’s GEST budget likely to be reduced from Pounds 251million to Pounds 214m, that represents around half the money available for all such projects and has angered local authorities struggling to fund other much-hyped initiatives, such as anti-drug and truancy campaigns.

The fund is the Government’s key method of targeting cash on areas it regards as priorities. While Mrs Shephard decides what areas are to be supported, local authorities have to bid for a slice of the ever-diminishing financial cake.

In 1991-92, grants totalled Pounds 364m, but this year the Government cut Pounds 20m from the programme, taking it down to Pounds 251m. In the main, Government provides 60 per cent of funding, while local authorities have to find 40 per cent.

The GEST programme this year covers 20 areas, from support for youth action schemes and projects on truancy to funding cover for schools for the national curriculum tests. Five grants were introduced this year by ministers - support for bilingual pupils, child protection, training for careers teachers, drug prevention in schools, and help for voluntary-aided technology colleges on technology, science and maths teaching.

The Government also introduced a new, broad school effectiveness grant which makes up nearly half of the GEST programme. It is this that is to be replaced by Mrs Shephard’s initiative to raise standards.

The school effectiveness grant has drawn together the majority of grants that support management and appraisal, the national curriculum and assessment. It focuses on school management through the training of governors, headteachers and other staff, supports the basic curriculum and assessment and information technology.

Local authorities are also able to bid for cash for projects covering local management schemes and LMS implementation teams, management training and development. At least 80 per cent of funding is devolved directly into schools, and they are free to spend the cash in accordance with their own priorities within the specified list.

Money under the school effectiveness grant is also spent on training costs for administration support staff in schools.

It goes on training to prepare deputy heads for headship, school staff as OFSTED inspectors, clerks to governing bodies, attendance at governor conferences, helplines, newsletters and briefings for governors. It is also spent on classroom and library books.

Other grants covered by GEST include help for local authorities and schools to implement the national curriculum task and test arrangements - supply cover for schools administering English and maths at KS1 and English, maths and science tasks at key stages 2 and 3 for less able pupils.

There is also money for courses for subject co-ordinators and specialists in primary, middle and special schools, training teachers of pupils with special needs and to support training educational psychologists.