Graham Lane, LGA education chair, said he suspected things had gone wrong because the the transfer of previously ring-fenced money into the general pot had come at the same time as changes to the local government funding formula.
It was possible that the confusion meant money that schools had been getting directly was now ending up in different parts of the system: in another school, a central LEA budget, or even another government department.
But schools were also at fault. They had been spending as much as 95 per cent of budgets on staff, when the sensible limit was 80-85 per cent. Some had been using recruitment and retention money, supposed to boost staff salaries, to pay for new teachers. "If you act like that you will go into deficit," he said. There was also the question of pound;1 billion of unspent money sitting in school reserves.
Mr Lane conceded that national insurance increases, performance pay awards and the inner-London pay allowance had been factors in budget shortfalls.
But he disputed the National Association of Head Teachers' assertion that pension contributions have increased by 5.15 per cent. It was more like 1 per cent, he said. And this, along with the teachers' pay rise of 2.9 per cent, had been covered by government funding increases.
Although 20 to 30 LEAs were predicting job losses, they were as much to do with falling pupil numbers as funding problems. He said most redundancies would be voluntary.
But LEAs remain concerned. This week Westminster council sent an angry letter to Charles Clarke warning there was not enough money from central Government.