HOW DO JOU LOSE [Pounds sterling]500M; Charles Clarke Says Councils Are Hoarding His Schools Cash. They Say He's Short-Changed Them

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CHARLES Clarke flatly blamed town halls for a pound sterling500million school funding crisis yesterday.

The Education Secretary accused councils of holding back or misallocating at least that amount.

But his claims infuriated local authority leaders who insisted the reverse was true - his department was not handing out all the cash they had been promised.

Mr Clarke gave a thinly veiled warning that local authorities could be stripped of powers to hand out schools cash.

He also promised to expose councils which had failed to pass on funding by publishing details of their budgets at the beginning of next month.

However, the country's biggest local authority, Kent, warned that council taxpayers were being left to make up huge shortfalls in the education budget set by Whitehall.

Heads are due to release a survey next week which will reveal the devastating impact on schools. As many as three quarters are said to face a budget crisis, raising the prospect of widespread redundancies.

The figures from the National Association of Head Teachers will show that barely one in four have seen increases in their basic budgets of more than 10 per cent - the amount needed to cover increases in teachers' salaries, pensions and National Insurance contributions.

But in a speech to the teachers' union the NAS/UWT, Mr Clarke insisted one in five councils had so far failed to hand out at least pound sterling5million to schools.

A survey of more than 90 councils had shown pound sterling339million had yet to be allocated and if this pattern is repeated across the

country then pound sterling500million is being held back, he told the conference in Bournemouth.

Mr Clarke suggested that funds for day-today expenditure were being diverted to pay costly capital projects and there were 'wide variations' in the cash councils were allocating to help children with special needs.

'It is local education authorities, not the Government, which distribute cash to individual schools,' he said.

'Each LEA makes a range of decisions which determine the budget for every school.

'I will be asking them to justify their decisions and asking them to set out the steps that they are intending to take to avoid any redundancies of teachers or classroom assistants because of perceived funding issues.' Mr Clarke said it would be a ' disaster' if schools were to shed staff only to discover it was unnecessary as LEAs were holding on to money. …