Local authorities are best placed to determine how much money should be spent on their schools, a Welsh Assembly committee tasked with reviewing school funding has heard.

But unions and headteachers told Assembly members tales of funding woe from the frontline, and called for more cash from central funds to be ring-fenced for education.

A special committee set up to clear the fog surrounding school funding heard this week from teacher unions and the Welsh Local Government Association (WLGA).

The National Union of Teachers Cymru reiterated its call for funding to be based on what schools are required to do, saying that this activity-led model would lead to greater clarity.

It said funding for the core functions of schools should be provided via an earmarked “teaching and learning grant”, which would have to be passed direct to schools by local authorities.

The Secondary Heads Association Cymru said it would also like to see ring-fenced funding to ensure more cash reaches the frontline.

Representatives told Assembly members that underfunding was resulting in teachers going off sick with stress, rain lashing through broken windows in their schools, and large classes placing huge strain on staff.

Hel ne Mansfield, head of Croesyceiliog comprehensive, Cwmbran, said: “We need schools which are fit for the 21st century - which means more money and resources are needed.”

She said local school budget forums, in which heads, governors and local authorities discuss funding allocations, were useful but did not explain where funds had come from.

Brian Lightman, head of St Cyres comprehensive, in Penarth, said his school’s good results were due to his teaching staff overworking, and that much more money was needed. At present, the Assembly government calculates how much it thinks each local authority needs to spend on services such as education or transport - generating an “indicator-based assessment” (IBA) for each spending area in each council.

Most of the funding is not ring-fenced, so councils can decide how much of their total budgets to spend on education or other services. This year, half of Wales’s 22 councils spent more than the Assembly’s IBA, and half spent less on education.

But the WLGA said centralising school funding could be counter-productive and costly. In a report to the committee, it said “one size did not fit all”. And it claimed academic achievement was not related to how much local authorities spent on schools.

Councillor John Davies, the WLGA’s education spokesperson, said it was a mistake to make spending comparisons between local authorities. Overall, Welsh councils spend pound;23 million more on education than the Assembly allocates centrally, and the present system is working, he added.

“Education spending is complex and should not be simplified. The postcode lottery does not exist because each council sets targeted spending based on needs.”

After the meeting, WLGA representatives said they were planning a new page on its website to explain how funding works.

The Assembly’s five-strong school funding committee is looking at the entire budget process, and will also examine the impact of Assembly and Westminster government initiatives on funding.