MONEY that should be going to schools is still being tied up in town hall red tape, head teachers said yesterday.

They renewed their call for wholesale reform of the local government funding formula, saying the current system was "well past its sell-by date".

The National Association of Head Teachers said the system produced huge discrepancies in funding per pupil across England, despite claims by the Government that most councils now meet its target.

The local government funding Green Paper due next month should include a national funding formula so that all schools get money directly from Whitehall on the same basis, the NAHT declared.

It should take into account factors such as deprivation and special educational needs, and should be transparent so parents can see how much was actually going to their children's schools.

School Standards Minister Estelle Morris said the Green Paper would "propose the development of separate schools and local education authority assessments as a practical way forward".

The union's analysis of council figures given to the Department for Education and Employment showed London schools enjoyed the highest funding per pupil.

In Kensington and Chelsea, average funding per primary school pupil was £2,872 compared with £1,650 in Darlington, County Durham.

Last night, Darlington Borough Council defended its position saying factors such as nursery education, special needs provision and a low level of pupils over the age of 16 had not been taken into consideration when the NAHT tables were drawn up.

Thirty-one councils failed to pass on at least 80 per cent of funding intended for education in the last financial year, the NAHT said, including North Tyneside. This contradicts the Government's claims.

When it published its own LEA league table earlier in the summer, the Government said Cornwall was the only council to miss the 80 per cent target.

NAHT general secretary David Hart said: "These figures are political dynamite.

"I think the Secretary of State David Blunkett was letting local authorities off the hook and our figures raise some serious questions."

Government sources said the NAHT had not included the Standards Fund money, 70 per cent of which councils were expected to hand over to schools. "We are confident our figures are pretty definitive," they added.

But Shadow Education Secretary Theresa May said: "Yet again Labour are playing with figures.

"Their claims about money going direct to schools hide the true picture which is that millions are being held back from schools."

The Conservative "free schools" policy would mean schools had an extra £540 per pupil to spend, she claimed.

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