THERE are some who argue that schools would be much better off if local councils were removed from education altogether. Cut out the middleman, go for direct funding, they say. They are wrong.

The attractions of such a system are understandable. The Government regularly criticises local councils for failing to increase their spending in line with increased central funding or for failing to “delegate” funding to schools. The councils counter that they have been spending way above Government expectations on education for many years and that they have to cope with conflicting demands on their finances, as well as the ever-present threat of budget-capping. And some councils are unhappy that they are much less well-funded than others.

Caught in the middle of this argument are teachers and parents. They want a better, more comprehensible system which enables them to see what funding their schools receive and who is making the decisions. But direct grants are not the answer.

For a start, such a system would involve a huge, new bureaucracy. The Government could not run 25,000 schools directly from Whitehall. It would require a new bureaucratic structure to provide the support that schools need to provide for children with special needs, school transport and help and advice for teachers and parents. A new national bureaucracy to follow the example of the National Health Service? Not an attractive prospect.

Local councils have a vital role in supporting schools. They don’t all do it as well as they should. But the weaker ones will improve and many do first-rate jobs. On Government figures, councils spend less than 2 per cent of schools budgets on central administration. And local taxpayers contribute pound;6 billion a year to the education service. The right answer must be to help all councils to be their best, rather than invent a whole new structure.

One alternative to doing away with local authorities is to keep them, but impose more central control. Advocates of this approach suggest the Government should ringfence the money it allocates for education. This would deprive councils of the right to dip in or add to the cash earmarked for education depending on local needs.

Those who propose this forget that local government has spent more on education than the Government’s assessment (the Standard Spending Assessment) for many years, in total, nearly pound;4bn ore since 199495. So if the last government had imposed ring-fenced spending, education services would have lost pound;4bn.

The present Government has been relatively generous to education. It may be that if ring-fencing were introduced now, schools would not lose out. But there would still be other major disadvantages.

First, service for schoools would be cut off from the rest of local services; it would for councils to deal with local circumstances in a “joined-up” way.

The quality of learning does not just depend on what happens in schools, it also depends on meeting the wider needs of children who might be in care, living in poor housing or having difficulty getting to school. That means integrating education, social services, housing and transport policies, not cutting them off from each other.

The second big danger of ring-fencing is that other government departments would want their spending ring-fenced too: social services, libraries, trading standards, environmental health, transport - and so it would go on.

We would have a series of separate spending programmes controlled from Whitehall, with no capacity to make connections between them at local level.

The result would be disastrous for local democracy. It would also be very bad for education. Local councils must retain their discretion to make spending decisions that reflect local needs.

Local discretion should, however, be exercised on a more transparent basis than it is now.

Authorities need to be open about what is spent on schools and what goes on central council services, and where the boundary lies.

The Local Government Association is keen to explore David Blunkett’s idea of distributing funding to local councils on the basis of a minimum entitlement per schoolchild, adjusted for factors such as social deprivation and sparsity in rural areas.

Councils would decide whether the needs of some schools justified any reallocation at local level - and parents and teachers could see what decisions were taken and by whom.

We expect this and other ideas to be explored in the local government finance Green Paper to be published later in the summer.

We will be happy to work on them in partnership with ministers and officials.

But we will resist those who advocate a more centralised system and the new bureaucracy that would entail. There are other, better ways to create a more effective and transparent system and to improve the education our children receive.

Sir Jeremy Beecham is the chairman of the Local Government Association