Local authorities facing a cut in Government support have been left more vulnerable by the erosion of their central power bases. The impact of this year's tough local government settlement is likely to be felt in schools. Most councils will attempt to protect school budgets, but previous cutbacks in central services limit their options.
Overall, local authorities are faced with a real cut in central government support from specific grants and business rates of 0.4 per cent. The settlement allows councils to increase spending by 2.2 per cent, just under the 2. 4 per cent level of inflation. However the figure does not take account of the extra cost of community care and local government reorganisation.
The total standard spending assessment has been set at Pounds 43.5 billion. The capping rules limit councils to raising at most another Pounds 1.1bn. The total of Pounds 44.6bn is less than the Pounds 45bn councils spent this year.
Problems are compounded by capping restrictions in a substantial number of authorities. Almost two-thirds of the metropolitan authorities and more than half the counties can only increase spending by 0.5 per cent without facing penalties.
The total standard spending assessment on education - the Government's estimate of what councils should be spending - is Pounds 17bn. The total for the shires is Pounds 10bn; for the metropolitan authorities, Pounds 4bn; for inner London, Pounds 1bn; for outer London, Pounds 1.5bn.
Comparison with previous years has been made difficult by the decision to end the practice of local education authorities reimbursing neighbouring councils for the cost of educating children who cross boundaries. The standard spending assessments have been adjusted to take account of the number of children actually being educated in the area rather than, as previously, those living there.
The counties appear to have done slightly better than the metropolitan areas, but that is likely to be accounted for by a more marked growth in pupil numbers in the shires.
According to the local government associations, councils raided their balances last year - around 1.8 per cent of spending came from contingency funds - and will be forced to reduce services and staffing this year.
Council officers are still working out what the Chancellor's Budget means for schools and services, but prospects appear gloomy.
In Dudley - where the Conservatives are fighting to hold on to a 5,000 majority in next week's Parliamentary by-election - the overall rise of 0.5 per cent was far below the five per cent the council estimated it would need, said Ron Westerby, chief education officer.
The council spends Pounds 8 million above its education SSA at present, and the latest figure would leave it struggling to cope with an overall shortfall of Pounds 9.5m.
Mr Westerby said: "We have experienced a sharp increase in pupil numbers of about 850 and calculated we needed something like Pounds 1.5m simply to stand still and hold the pupil-teacher ratio.
"The scope for cutting back on central services is now limited in the extreme because Dudley holds back just five per cent and over the last two years we have decimated our support and administrative services to maintain the money given to schools. If there are any cuts it seems to me almost certain that some or a high proportion will fall on the aggregate schools budget."
Roy Lockwood, Wolverhampton's assistant director of education, said the half-per-cent increase would have possible implications for schools. "We are clearly expecting pupil-teacher ratios to get significantly worse. Jobs will be on the line in general. So far the council has avoided compulsory redundancies of teachers but this will get more difficult."
Eddie Oram, principal education officer in Hereford and Worcester, which received a 1.48 per cent increase, said the authority still faced a difficult time. "We need Pounds 2m or Pounds 3m for the 2,000 extra pupils in the county and if we have to fund a two per cent teachers pay award we may be struggling. "
Stanley Goodchild, Berkshire's chief education officer, which received less than 1 per cent, said the future "looks a bit bleak. Even if the teachers' pay award is 2 per cent we will face a shortfall, and the cost of our additional pupils is somewhere in the region of Pounds 2.7m, which is quite worrying.
"Berkshire has devolved so much to schools that very little is held at the centre which could be cut without directly affecting what happens in schools. "
And though the shires fared better than their metropolitan counterparts in general, David Whitbread, under-secretary of the Association for County Councils, warned: "For most shire county areas the situation is pretty dire." The majority received less than 1 per cent and many of the remaining 12 got just above 1 per cent. Surrey received the biggest slice of the cake at 2.6 per cent. Mike Taylor, the county's assistant director for resources, said the education spending assessment would rise by almost four per cent because of rising pupil numbers, the changed method for calculating the number of children in an authority and area cost weightings.
He said: "We plan to fund the teacher's pay award and additional pupils and we are not panicking too much about pupil-teacher ratios."
In the metropolitan boroughs, 45 out of 68 had reached their capping limit and were given a half per cent increase in their SSA. Just seven had increases of between 1 and 2 per cent.