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Please note this is an excerpt from

Council leaders have urged ministers to stop interfering with councils’ role in the education system and ditch plans to centralise schools funding.

The Local Government Association responded sternly this week to leaked coalition plans for a national formula to fund schools from 2012. The measure could be included in education secretary Michael Gove’s forthcoming education White Paper, and would bypass councils’ current role.

Under the current education funding system, local authorities receive cash for schools from the Government and pass on more than £30bn in dedicated schools grant directly. Local authorities then co-ordinate other aspects of local education policy – such as cash for special educational needs.

But the national plan being considered by the education secretary, which intends to complement ‘free schools’ and wider use of academies, would threaten councils’ co-ordinating function.

Baroness Margaret Eaton, LGA chair, said: ‘While local authorities may have managed education budgets for more than a century, the amount of control councils actually have has steadily diminished while interference from central government has increased.

‘Councils should be given a new role as local commissioners of education provision in their areas. If the range and diversity of providers is to increase, there needs to be a system in place to make sure that public money is allocated fairly and efficiently, and that sufficient places are available to meet local need.

‘We also believe it would be better to retain the current streamlined method for schools funding – the dedicated schools grant – which channels money effectively to schools via local councils, without the need for additional bureaucracy.’

Indeed, Mr Gove could establish a new quango to co-ordinate the distribution of schools cash in future, but many localists have pointed out that runs against the grain of the coalition’s plan to reduce the number of quangos.

A senior councillor told The MJ: ‘A system that diminishes the crucial role of councils in co-ordinating local education, and which introduces a new quango to Whitehall, doesn’t sound like the language of localism we were told the coalition would speak.’

Chris Keates, general secretary of the NASUWT education trade union, accused ministers of ‘irrational contempt’ towards local authorities.

But ministers believe the current funding system fails to address needs. ‘[It] leads to huge variations in the money similar schools receive so we want to introduce a fairer, more transparent system,’ a Department for Education spokesperson said.

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