Grant-maintained schools have been forced to cut staff and spending on books and equipment because of cash shortages. More than half of Britain's 1, 000 GM schools slashed budgets this year - some by 10 per cent - and many will only survive the crisis by delaying essential repairs and maintenance and using up reserves.
GM heads have told the Government that it must fully fund next year's pay award for teachers if education is not to suffer irreparable harm. The disclosure that they have also been hit hard by cuts will be embarrassing for the Government in the light of John Major's drive for more GM schools.
A survey of more than 1,000 opted-out schools by the Grant-Maintained Schools Advisory Committee reveals widespread disillusionment over funding and disenchantment among staff. "There is a deep sense of malaise about the health of the profession at its very heart," says the committee.
The survey forms the basis of the GM submission to the School Teachers' Review Body which discloses that a third of schools relied on existing funds to reduce a budget shortfall while half of GM primary schools have now either spent or severely eroded their savings.
Staffing was cut in 15 per cent of GM secondary schools, while 15 per cent of primary and secondary schools had reduced spending on books and equipment and a third of them cut back on maintenance.
"It is a very disturbing picture," says Jerry Oddie, chair of the personnel and staff development sub-committee of GMSAC. "There are a lot of heads who are anxious about this year and there will be many who are desperately anxious if the pay award is not fully funded next year."
Just two months ago The TES revealed that more than 50 opted-out schools were living on overdrafts, agreed with the Funding Agency for Schools - the quango set up to monitor and administer GM funding.
Martin Rogers, from the local authority-backed Local Schools Information, says: "This survey just demonstrates that opted-out schools are as vulnerable as LEA schools. I hope they will join with LEA colleagues to campaign for more money for education."
According to the submission, morale was low and worsening following a series of less than reasonable settlements "culminating in that for 1995-96 which has been little less than calamitous". Staff were disillusioned, management teams were getting little or no recognition for the job they were doing and a low turnover of staff was leading to stagnation.
"An increasing number of schools report staff avoiding promotion because of a perception that pay levels do not match the additional responsibility and the associated stress arising from high-profile accountability," says the survey.
Money needed to be directed at middle management to encourage teachers to fulfil their potential, but the heads rejected performance-related pay. They say returners to teaching should not immediately be paid according to the national pay scale as their skills are often rusty or outdated. They also think supply teachers should not be automatically paid the same rate as full-timers as this fails to differentiate between levels of commitment.