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What the Government says

In July last year Chancellor Gordon Brown awarded education a windfall Pounds 835 million. This was to raise standards in schools and was not to go on teachers' pay.

In December deputy Prime Minister John Prescott said that local government spending in England was to rise to Pounds 48.2 billion, an increase of 3.8 per cent. Total spending on education would increase to Pounds 19.4bn, a 5. 7 per cent rise. He announced a relaxation in local government spending limits - allowing councils to levy higher council taxes: Labour's "new money" will go on:

Education: Pounds 1.06bn (including the Pounds 835m from Government reserves).

Community care: Pounds 350m.

Children's social services: Pounds 70m.

Private Finance Initiative: Pounds 20m.

What the councils say

When inflation is taken into account the Government's rise of 5.7 per cent in education spending falls to 2 per cent. The grand total of Pounds 19.4 billion is only marginally more than councils planned to spend anyway.

Between a half and 1per cent of the increase will be absorbed by the cost of providing for the rise in pupil numbers.

In addition, the Government is holding back a larger share of the funds for specific initiatives for raising standards.

Ministers appear keen to reduce the amount retained by local authorities for administration and other services. The impact of providing schools with a greater share of the education budget is to reduce the total available for local authorities' discretionary spending.

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