Chancellor Gordon Brown giveth but he also taketh away. That is the view of + councils anxiously awaiting a Scottish Office circular on how and where the + extra educational expenditure announced in Mr Brown's July Budget is to be + spent. Details had been expected by now but a Scottish Office spokesman said + the authorities would have to wait for "a few weeks".The sums available are + substantial - nearly #163;116 million in the next financial year alone - but + councils are also facing deep cuts next year as the Chancellor retains his iron+ grip on public finances. Council expenditure will remain capped for next year + and the Government has made clear the additional cash must not be used to + cushion the effects of normal spending reductions. It will also be restricted + to specified educational priorities."Passporting" is the latest piece of + official terminology. The new money must be a passport to further development, + not a way of alleviating cuts.John Stodter, Aberdeen's director of education, + warned of "a major tension between the additional money being made available + and the realities facing councils next year. Our finance department is + estimating cuts of #163;20 million across the council as a whole and their + predictions have been bang on target in the last two years."Aberdeen calculates+ it would get just #163;3.5 million out of the #163;89 million available in + additional revenue expenditure next year and #163;1 million of the #163;26.7 + million in capital allocations for upgrading school buildings and updating + information technology in the classroom.Ken Corsar, Glasgow's director, said: + "It is going to look decidedly incredible if I go into a primary school and + tell them they are to receive an additional 0.25 per cent courtesy of the + Chancellor, but that they are also going to lose 1.25 per cent of their budget + thanks to the Chancellor." Glasgow is braced for a minimum 6 per cent spending + reduction next year, which represents #163;17 million for education. "That is + simply impossible," Malcolm Green, the city's education convener, declared.John+ Dobie, depute director of education in Edinburgh, which expects at least + #163;5 million extra, shares these concerns particularly if councils are + hamstrung in restoring underprovisio n as a result of year-on-year cuts.The way+ in which the cash is to be distributed is also a matter of dispute. Councils + oppose ring-fencing through a specific grant, and the Secretary of State has + bowed to that view, for at least the bulk of the new money. Neither are + councils enamoured of challenge bids. Norie Williamson of the Convention of + Scottish Local Authorities said that would involve "a lot of extra work + preparing what often turn out to be abortive bids". A report to the Scottish + Office on how and where the money has been spent should suffice, Mr Williamson + said.The Scottish Office is believed to be considering an amalgam of approaches+ to square the circle of Treasury rules and Cosla reservations. It appears + happy to distribute #163;59 million of the #163;89 million in extra revenue + expenditure next year on the normal grant formula. Under this Glasgow would + receive #163;6.6 million. Another #163;15 million would be distributed to + fund capital projects out of revenue expenditure and the remaining #163;15 + million would be allocated by councils bidding for a share.The first element of+ #163;59 million is to be spent on three Government priorities with which + Cosla is perfectly happy. These include raising school standards and putting + additional resources into the classroom, the details of which will be spelt out+ in the Scottish Office circular. The third item is early years education. But+ it is yet to be clarified whether this is additional expenditure on top of the+ full #163;70 million made available under the nursery voucher scheme which + ends next year and which included #163;40 million removed from education + budgets.The Scottish Office has told the authorities that ministers wish to + improve "early years standards". But it is not clear whether this will impinge + on the early intervention strategy to which the Government and councils have + already committed #163;24 million.The Government is proposing that the + authorities invest the remaining #163;30 million in "spend to save" schemes, + half of which would be allocated under challenge bids specifically to encourage+ councils to close schools.A letter from the Scottish Office to the councils, + which has been seen by The TES Scotland, states: "Councils would be invited to + say what spend to save investments could be made if funds of the size indicated+ were available, and the level of savings which would result."The Secretary of + State is conscious there may be a number of areas where investment in fabric or+ buildings would enable substantial savings to be realised, though he + understands the political difficulties faced by councils in making, for + example, choices about school closures. He would like to use these funds to + help councils where these issues are particularly pressing."This is a broad + hint that the money may largely go to Glasgow, which is already preparing to + tackle its major educational headaches (page one). Previous efforts to close + city schools have collapsed following parental opposition and councillors' + unwillingness to face down the anger.The Scottish Office now appears prepared + to help councils by sweetening the pill, a recommendation made some time ago by+ the Accounts Commission. Successful bids would be those which can demonstrate + "swift and substantial payback" in reduced running costs (closing the average + secondary school eventually saves #163;1 million a year)."This funding would + allow authorities to make investment in improving schools, making them more + attractive to parents who might be concerned about closures," the Scottish + Office states.This means councils like Fife, which have large secondary schools+ and therefore little scope for achieving significant savings, are unlikely to + be successful bidders. But even Glasgow, with almost 50,000 surplus school + places, could have problems. If legislation on opting out remains on the + statute book, Dr Green says, "it only takes 30 signatures from parents seeking + opting-out status to delay the closure of their school for a year which means, + that since the extra provision is only available for a year, the money + falls".Dr Green said that if Glasgow was not given its full share to tackle the+ major educational problems the city faces "there will be no credibility in the+ scheme". He intends writing to Brian Wilson, the Education Minister, urging + him "to state loudly and clearly and repeatedly that he will not approve any + opt-out proposal, which simply requires him to repeat the Michael Forsyth + formula that the legislation cannot be used to frustrate school rationalisation+ programmes. If the architect of opting out can say that, Mr Wilson certainly + can."Mr Wilson said in May that self-governing schools would be "a thing of the+ past". But he does not propose to scrap the legislation and Dr Green fears it + will still be used to embarrass councillors in the hope that they will back + off. For the schools that remain, #163;26.7 million in capital monies will be + available in each of the next four years for modernising buildings and + investing in information technology. An additional #163;8.9 million is being + provided this year to help clear an estimated #163;200 million backlog in + maintenance and repairs.Councils are anxious to get their hands on this first + instalment since only seven months of the current financial year remain. But + the Government's whole approach marks a significant change of emphasis in the + general grant-aided funding of services, which leaves ministers powerless to + insist on priorities.Specific grants are for particular purposes, such as + Gaelic-medium education. But this has been the exception, although the growing + use of challenge bids in areas such as exclusion and early intervention heralds+ a shift. Ministers clearly now want more accountability in how councils + spend central funds.