HC Deb 23 October 1990 vol 178 cc139-49W
14. Mr. Hind

To ask the Secretary of State for Education and Science what proportion of the primary and secondary education budget local authorities are retaining for central administration; and if he will make a statement.

52. Mr. Evennett

To ask the Secretary of State for Education and Science whether he will consider taking action against local authorities that hold back funds from schools in order to finance central bureaucracy.

4. Mr. MacGregor

The published budget statements for 1990–91 indicate that the amount which local education authorities are planning to retain for central administration varies from 2 per cent. to 8 per cent. of the funds available for spending by primary and secondary schools. The average is 3.8 per cent.

I am arranging for the details of each local authority's spending on central administration and on other items to be printed in the Official Report. I believe it is essential that as much as possible of the schools budget of local authorities should be given directly to the schools to manage themselves; and I shall be making further proposals to that end later this year.

LEA ranked by discretionary exceptions percentage of PSB Rank Discretionary exceptions per cent. Discretionary exceptions £000 Number of schools Average discretionary exceptions per school £
(1) (2) (3) (4) (5)
Cornwall 41 22.90 23,660 288 82,000
Bexley 42 22.89 12,514 86 146,000
Trafford 43 22.76 10,566 100 106,000
Dorset 44 22.66 29,875 258 116,000
Warwickshire 45 22.53 25,310 283 89,000
Richmond 46 22.50 6,906 50 138,000
Cleveland 47 22.49 36,460 264 138,000
Cheshire 48 22.44 55,632 547 102,000
Salford 49 22.40 13,785 113 122,000
Tameside 50 22.37 12,518 103 122,000
Barnet 51 22.25 15,951 112 142,000
Knowsley 52 22.19 10,472 82 128,000
Wiltshire 53 22.18 28,074 339 83,000
Ealing 54 22.03 15,675 105 149,000
Sandwell 55 21.95 19,587 144 136,000
Surrey 56 21.90 45,602 439 104,000
Shropshire 57 21.80 23,696 258 92,000
Wigan 58 21.70 18,123 153 118,000
Gloucestershire 59 21.70 25,793 305 85,000
Harrow 60 21.67 10,056 64 157,000
Sutton 61 21.51 8,130 58 140,000
Rotherham 62 21.51 15,381 135 114,000
Brent 63 21.28 14,876 90 165,000
Dudley 64 21.23 14,791 111 133,000
Solihull 65 20.77 11,289 87 130,000
Buckinghamshire 66 20.70 31,211 341 92,000
Rochdale 67 20.69 11,279 101 112,000
Sunderland 68 20.64 15,941 125 128,000
Redbridge 69 20.61 9,898 71 139,000
Bedfordshire 70 20.47 29,172 292 100,000
Bolton 71 20.14 13,891 124 112,000
Liverpool 72 20.14 27,287 275 99,000
Essex 73 19.82 70,591 696 101,000
Walsall 74 19.60 15,326 131 117,000
Kent 75 19.59 65,607 736 89,000
Leeds 76 19.24 35,235 336 105,000
Bradford 77 19.00 25,806 255 101,000
Northamptonshire 78 18.79 28,182 339 83,000
West Sussex 79 18.66 24,939 285 88,000
Lincolnshire 80 18.64 23,732 363 65,000
Havering 81 18.44 11,419 94 121,000
Suffolk 82 18.31 26,683 339 79,000
Berkshire 83 17.49 28,341 339 84,000
Sefton 84 17.00 12,626 123 103,000
Notes to Table A
1990–91 budgets: Discretionary exceptions and school budgets
Column 1. Rank. Each local education authority is ranked in order of the percentage of planned Potential Schools Budget retained as central spending on discretionary exceptions. Highest percentage is ranked as 1.
Column 2. Discretionary exceptions as a percentage of the Potential Schools Budget.
Column 3. Discretionary exceptions. Planned spending in £000s.
Column 5. Average discretionary exceptions per school. Total discretionary exceptions (column 3) divided by the number of primary and secondary schools in the local education authority (column 4), expressed in £s.
Calderdale, Hampshire and Waltham Forest have not yet published their budget statements.

Table B
1990–91 Budgets: Total LMS spending
Lea General schools budget (GSB) Mandatory capital Exceptions specific grants Potential schools budget (PSB) Discretionary exceptions Aggregated schools budget (ASB) ASB as per cent of PSB Limited exceptions as per cent of GSB
000's 000's 000's 000's 000's 000's Per cent Per cent
(1) (2) (3) (4) (5) (6) (7) (8)
Avon 254,188 19,233 9,730 225,225 58,857 166,368 73.87 9.66
Barking 48,959 2,763 1,801 44,395 12,508 31,887 71.83 9.36
Barnet 82,118 6,806 3,613 71,699 15,951 55,748 77.75 7.55
Barnsley 64,857 5,563 2,480 56,814 14,393 42,421 74.67 9.76
Bedfordshire 166,429 16,573 7,327 142,529 29,172 113,357 79.53 8.89
Berkshire 186,750 17,114 7,598 162,038 28,341 133,697 82.51 7.10
Bexley 63,996 7,162 2,161 54,673 12,514 42,159 77.11 9.99
Birmingham 311,649 22,506 15,784 273,359 64,915 208,444 76.25 8.85
Bolton 76,989 3,896 4,128 68,965 13,891 55,074 79.86 6.39

Lea General schools budget (GSB) Mandatory capital Exceptions specific grants Potential schools budget (PSB) Discretionary exceptions Aggregated schools budget (ASB) ASB as per cent of PSB Limited exceptions as per cent of GSB
000's 000's 000's 000's 000's 000's Per cent Per cent
(1) (2) (3) (4) (5) (6) (7) (8)
Bradford 167,098 18,612 12,637 135,849 25,806 110,043 81.00 6.62
Brent 82,980 8,003 5,072 69,905 14,876 55,029 78.72 7.57
Bromley 72,167 6,723 2,192 63,252 15,101 48,151 76.13 9.61
Buckinghamshire 175,552 18,842 5,945 150,765 31,211 119,554 79.30 7.74
Bury 49,301 2,333 2,092 44,876 10,804 34,072 75.92 8.88
Calderdale
Cambridgeshire 198,894 30,447 7,296 161,151 42,587 118,564 73.57 9.20
Cheshire 272,323 17,840 6,531 247,952 55,632 192,320 77.56 7.81
Cleveland 176,430 8,830 5,490 162,110 36,460 125,650 77.51 8.54
Cornwall 123,669 16,840 3,508 103,321 23,660 79,661 77.10 8.58
Coventry 103,753 16,435 5,285 82,033 22,121 59,912 73.03 8.31
Cumbria 148,681 13,874 4,196 130,611 37,605 93,006 71.21 7.84
Derbyshire 281,816 17,013 9,504 255,299 68,649 186,650 73.11 10.00
Devon 259,039 34,716 7,859 216,464 54,804 161,660 74.68 9.31
Doncaster 91,707 2,739 1,959 87,009 20,555 66,454 76.38 9.06
Dorset 150,463 14,480 4,149 131,834 29,875 101,959 77.34 9.91
Dudley 80,360 7,836 2,863 69,661 14,791 54,870 78.77 8.93
Durham 165,830 7,523 5,911 152,396 37,597 114,799 75.33 9.13
Ealing 75,718 2,130 2,431 71,157 15,675 55,482 77.97 9.70
East Sussex 152,548 12,762 3,920 135,866 34,183 101,683 74.84 9.92
Enfield 97,756 24,679 3,055 70,022 16,129 53,893 76.97 7.89
Essex 394,215 25,729 12,349 356,137 70,591 285,546 80.18 9.45
Gateshead 59,287 5,592 2,267 51,428 12,026 39,402 76.62 9.65
Gloucestershire 132,498 9,273 4,351 118,874 25,793 93,081 78.30 5.80
Hampshire
Haringey 66,430 5,319 3,561 57,550 16,498 41,052 71.33 9.87
Harrow 52,453 3,947 2,101 46,405 10,056 36,349 78.33 9.52
Havering 71,544 7,247 2,378 61,919 11,419 50,500 81.56 9.79
Hounslow 70,621 8,297 3,821 58,503 15,358 43,145 73.75 9.21
Humberside 262,351 19,380 5,812 237,159 58,145 179,014 75.48 10.00
Isle of Wight 32,386 2,704 962 28,720 7,034 21,686 75.51 9.63
Kent 377,100 32,624 9,493 334,983 65,607 269,376 80.41 8.74
Kingston 38,856 4,847 1,185 32,824 8,238 24,586 74.90 9.76
Kirklees 118,125 7,934 5,822 104,369 27,095 77,274 74.04 9.17
Knowsley 51,385 2,008 2,178 47,199 10,472 36,727 77.81 9.69
Lancashire 389,891 35,985 15,820 338,086 78,055 260,031 76.91 9.74
Leeds 211,636 21,099 7,425 183,112 35,235 147,877 80.76 6.73
Lincolnshire 146,545 16,601 2,648 127,296 23,732 103,564 81.36 8.86
Liverpool 146,077 7,391 3,197 135,489 27,287 108,202 79.86 8.82
Merton 52,327 11,317 792 40,218 9,885 30,333 75.42 7.86
Newcastle 83,105 5,551 3,160 74,394 21,030 53,364 71.73 9.58
Norfolk 185,345 9,534 3,518 172,293 40,248 132,045 76.64 9.47
North Tyneside 59,694 2,782 2,097 54,815 13,237 41,578 75.85 9.82
North Yorkshire 181,033 7,862 6,529 166,642 43,087 123,555 7414 9.94
Northamptonshire 168,620 13,062 5,593 149,965 28,182 121,783 81.21 9.24
Northumberlaned 82,352 4,970 3,423 73,959 17,851 56,108 75.86 6.82
Nottinghamshire 289,244 12,839 8,384 268,021 65,781 202,240 75.46 9.55
Oldham 72,835 3,114 5,380 64,341 16,546 47,795 74.28 9.90
Oxfordshire 155,280 15,969 5,389 133,922 32,474 101,448 75.75 9.53
Redbridge 56,517 7,801 701 48,015 9,898 38,117 79.39 8.34
Richmond 35,893 3,919 1,282 30,692 6,906 23,786 77.50 9.61
Rochdale 65,145 6,739 3,893 54,513 11,279 43,234 79.31 8.22
Rotherham 77,711 4,004 2,187 71,520 15,381 56,139 78.49 7.29
Sandwell 102,615 8,086 5,300 89,229 19,587 69,642 78.05 10.00
Salford 72,487 8,191 2,762 61,534 13,785 47,749 77.60 8.07
Sefton 81,776 7,265 246 74,265 12,626 61,639 83.00 5.85
Sheffield 138,252 10,135 5,835 122,282 28,178 94,104 76.96 9.96
Shropshire 121,021 7,889 4,456 108,676 23,696 84,980 78.20 9.36
Solihull 61,559 5,040 2,173 54,346 11,289 43,057 79.23 8.98
Somerset 125,560 12,579 4,788 108,193 25,955 82,238 76.01 9.75
South Tyneside 49,393 6,896 1,698 40,799 10,702 30,097 73.77 7.14
Staffordshire 286,997 17,662 12,033 257,302 60,397 196,905 76.53 8.14
St. Helens 59,191 5,915 1,812 51,464 13,350 38,114 7406 8.98
Suffolk 171,625 20,527 5,389 145,709 26,683 119,026 81.69 7.93
Sunderland 85,708 5,878 2,580 77,250 15,941 61,309 79.36 7.21
Surrey 235,802 21,794 5,748 208,260 45,602 162,658 78.10 5.92
Sutton 47,324 8,341 1,184 37,799 8,130 29,669 78.49 8.59
Tameside 62,562 3,778 2,833 55,951 12,518 43,433 77.63 9.00
Trafford 64,027 15,690 1,908 46,429 10,566 35,863 77.24 6.94
Wakefield 92,050 6,396 3,088 82,566 20,968 61,598 74.60 9.81
Walsall 90,437 7,392 4,857 78,188 15,326 62,862 80.40 7.99
Waltham Forest
Warwickshire 126,498 8,834 5,321 112,343 25,310 87,033 77.47 7.46

Lea General schools budget (GSB) Mandatory capital Exceptions specific grants Potential schools budget (PSB) Discretionary exceptions Aggregated schools budget (ASB) ASB as per cent of PSB Limited exceptions as per cent of GSB
000's 000's 000's 000's 000's 000's Per cent Per cent
(1) (2) (3) (4) (5) (6) (7) (8)
Westminster 53,080 5,565 2,864 44,651 11,651 33,000 73.91 8.88
West Sussex 152,463 14,308 4,519 133,636 24,939 108,697 81.34 7.91
Wigan 91,278 4,393 3,385 83,500 18,123 65,377 78.30 9.52
Wiltshire 144,302 12,139 5,563 126,600 28,074 98,526 77.82 9.90
Wolverhampton 82,331 5,872 4,180 72,279 18,489 53,790 74.42 9.48
Averages 77.23 8.76

1990–91 Budgets: Discretionary exceptions as percentage of potential schools budget
LEA Unlimited items Limited items
Central Admin Home to school transport School meals Transitional items Other unlimited items Total unlimited items Repairs and maintenance Other limited items Total limited items Total discretionary items
Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent
(9) (10) (11) (12) (13) (14) (15) (16) (17) (18)
Avon 3.06 1.86 5.15 3.23 1.93 15.23 2.78 8.12 10.90 26.13
Barking 8.20 0.33 4.20 3.37 1.75 17.85 5.16 5.16 10.33 28.17
Barnet 4.67 0.42 547 1.94 1.09 13.59 1.29 7.36 8.65 22.25
Barnsley 2.56 0.18 7.20 3.07 1.18 14.20 0.44 10.70 11.14 25.33
Bedfordshire 3.70 2.04 3.31 0.00 1.04 10.08 2.91 7.47 10.38 20.47
Berkshire 2.55 2.08 0.48 3.33 0.86 9.30 1.97 6.22 8.19 17.49
Bexley 4.38 0.35 4.02 0.81 1.63 11.19 3.30 8.40 11.70 22.89
Birmingham 4.01 0.38 6.11 1.69 1.48 13.66 2.96 7.13 10.09 23.75
Bolton 1.81 0.45 8.48 1.46 0.82 13.01 1.38 5.76 7.13 20.14
Bradford 3.64 0.50 5.36 0.00 1.35 10.85 0.65 7.49 8.14 19.00
Brent 4.53 0.29 5.58 0.00 1.90 12.30 0.00 8.98 8.98 21.28
Bromley 4.24 0.98 2.49 2.20 3.00 12.91 2.42 8.55 10.97 23.87
Buckinghamshire 4.28 2.82 1.04 2.72 0.82 11.69 2.44 6.57 9.01 20.70
Bury 4.35 0.34 6.97 0.00 2.65 14.32 1.47 8.29 9.76 24.08
Calderdale
Cambridgeshire 4.39 2.49 4.48 1.91 1.80 15.08 3.99 7.36 11.35 26.43
Cheshire 4.74 1.49 4.41 2.10 1.12 13.86 3.38 5.20 8.58 22.44
Cleveland 5.15 0.47 6.85 0.00 0.73 13.20 3.08 6.21 9.29 22.49
Cornwall 3.43 2.74 5.00 0.00 1.47 12.63 2.69 7.58 10.27 22.90
Coventry 5.41 0.27 4.90 4.58 1.29 16.45 1.14 9.37 10.52 26.97
Cumbria 3.49 2.76 6.03 4.93 2.66 19.87 0.96 7.96 8.92 28.79
Derbyshire 2.59 1.31 8.41 2.59 0.95 15.86 2.57 8.46 11.03 26.89
Devon 2.75 2.55 4.06 3.52 1.29 14.18 3.90 7.24 11.14 25.32
Doncaster 2.05 0.12 7.79 2.71 1.40 14.07 2.44 7.11 9.55 23.62
Dorset 4.45 2.13 0.60 2.78 1.38 11.35 3.71 7.60 11.32 22.66
Dudley 3.39 0.20 3.86 2.15 1.33 10.93 1.79 8.51 10.30 21.23
Durham 3.94 2.06 6.32 1.00 1.41 14.73 1.24 8.70 9.94 24.67
Ealing 6.04 0.54 3.98 0.00 1.15 11.71 1.81 8.51 10.32 22.03
East Sussex 2.16 1.10 6.35 3.55 0.87 14.02 3.45 7.69 11.14 25.16
Enfield 5.25 0.19 2.99 2.38 1.20 12.01 4.01 7.01 11.02 23.03
Essex 3.92 2.34 1.44 0.80 0.86 9.37 2.79 7.67 10.46 19.82
Gateshead 2.77 0.31 3.88 3.82 1.48 12.26 2.37 8.76 11.13 23.38
Gloucestershire 3.29 2.37 3.90 3.50 2.18 15.24 0.00 6.46 6.46 21.70
Hampshire
Haringey 5.42 0.00 7.50 2.62 1.74 17.28 0.80 10.59 11.39 28.67
Harrow 5.53 0.67 3.25 0.00 1.46 10.91 1.60 9.16 10.76 21.67
Havering 2.21 0.67 1.74 0.33 2.17 7.13 2.55 8.76 11.31 18.44
Hounslow 4.69 0.24 5.70 3.67 0.83 15.13 1.68 9.43 11.12 26.25
Humberside 3.30 1.21 4.12 2.29 2.53 13.46 4.31 6.75 11.06 24.52
Isle of Wight 4.29 2.81 2.88 2.76 0.90 13.63 1.81 9.05 10.86 24.49
Kent 3.59 2.28 1.46 1.51 0.90 9.74 2.18 7.66 9.84 19.59
Kingston 6.77 0.46 4.08 0.00 2.24 13.54 2.06 9.49 11.56 25.10
Kirklees 3.54 0.73 7.12 3.36 0.84 15.59 1.41 8.96 10.38 25.96
Knowsley 4.81 0.11 4.89 0.00 1.82 11.64 4.04 6.51 10.55 22.19
Lancashire 3.39 1.08 5.16 0.71 1.15 11.86 2.82 8.41 11.23 23.09
Leeds 3.63 0.72 3.76 1.75 1.60 11.46 1.16 6.62 7.78 19.24
Lincolnshire 2.56 2.81 1.62 0.00 1.45 8.44 4.11 6.09 10.20 18.64
Liverpool 3.83 0.22 5.74 0.00 0.84 10.63 0.84 8.67 9.51 20.14
Merton 7.43 0.19 1.29 4.00 1.45 14.35 1.81 8.41 10.22 24.58
Newcastle 5.50 0.33 6.16 3.57 2.00 17.57 1.67 9.04 10.70 28.27
Norfolk 3.71 3.04 5.31 0.00 1.11 13.17 2.70 7.49 10.19 23.36
North Tyneside 4.63 0.13 6.81 0.89 0.98 13.45 2.40 8.30 10.70 24.15
North Yorkshire 3.72 2.98 4.82 2.46 1.08 15.06 0.00 10.80 10.80 25.86
Northamptonshire 3.53 1.95 2.22 0.00 0.71 8.41 1.97 8.42 10.39 18.79
Northumberland 2.72 3.47 2.86 6.01 1.49 16.54 1.34 6.26 7.60 24.14

LEA Unlimited items Limited items
Central Admin Home to school transport School meals Transitional items Other unlimited items Total unlimited items Repairs and maintenance Other limited items Total limited items Total discretionary items
Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent Per cent
(9) (10) (11) (12) (13) (14) (15) (16) (17) (18)
Nottinghamshire 4.78 1.04 6.32 1.42 0.67 14.23 2.30 8.01 10.31 24.54
Oldham 4.53 0.07 6.42 2.52 0.97 14.51 1.92 9.29 11.21 25.72
Oxfordshire 5.09 2.14 4.77 0.00 1.21 13.20 1.89 9.16 11.05 24.25
Redbridge 4.71 0.51 2.58 0.94 2.06 10.80 2.58 7.24 9.82 20.61
Richmond 6.70 0.36 2.74 0.00 1.46 11.26 2.38 8.86 11.24 22.50
Rochdale 2.36 0.32 7.18 0.00 1.00 10.86 2.78 7.05 9.83 20.69
Rotherham 3.41 0.58 5.95 2.33 1.32 13.59 1.57 6.35 7.92 21.51
Sandwell 3.52 0.36 5.88 0.00 0.70 10.45 3.60 7.90 11.50 21.95
Salford 2.94 0.01 4.35 3.67 1.93 12.90 0.41 9.10 9.51 22.40
Sefton 4.23 0.35 4.73 0.00 1.25 10.56 2.38 4.06 6.44 17.00
Sheffield 3.25 0.17 6.68 0.00 1.69 11.78 2.40 8.86 11.26 23.04
Shropshire 2.29 2.23 5.34 0.00 1.52 11.38 3.56 6.86 10.42 21.80
Solihull 2.31 0.51 5.00 1.62 1.17 10.61 2.15 8.02 10.17 20.77
Somerset 3.28 3.41 4.91 0.00 1.07 12.67 1.77 9.55 11.32 23.99
South Tyneside 3.70 0.04 6.59 5.29 1.96 17.58 0.00 8.65 8.65 26.23
Staffordshire 4.08 1.29 4.77 3.50 0.76 14.39 2.41 6.67 9.08 23.47
St. Helens 3.29 0.57 5.50 4.99 1.27 15.61 1.48 8.85 10.33 25.94
Suffolk 2.62 2.53 1.16 0.94 1.72 8.98 2.03 7.30 9.34 18.31
Sunderland 2.83 0.25 6.52 1.86 1.18 12.64 1.99 6.01 8.00 20.64
Surrey 5.64 1.80 5.38 1.54 0.83 15.19 1.11 5.60 6.71 21.90
Sutton 3.81 0.61 3.15 2.17 1.02 10.76 1.74 9.02 10.75 21.51
Tameside 2.27 0.39 5.05 2.59 2.01 12.31 1.82 8.25 10.07 22.37
Trafford 3.20 0.49 5.62 2.35 1.54 13.19 1.32 8.25 9.57 22.76
Wakefield 2.69 0.35 7.64 1.99 1.80 14.46 3.02 7.91 10.94 25.40
Walsall 3.16 0.30 5.90 0.00 0.99 10.36 0.91 8.34 9.24 19.60
Waltham Forest
Warwickshire 3.55 1.90 4.87 2.35 1.47 14.13 1.99 6.41 8.39 22.53
Westminster 7.77 0.45 4.76 0.00 2.55 15.53 1.08 9.48 10.56 26.09
West Sussex 1.82 1.46 4.91 0.66 0.79 9.64 2.36 6.66 9.02 18.66
Wigan 3.48 0.32 5.44 0.22 1.83 11.30 0.96 9.45 10.41 21.70
Wiltshire 3.71 2.41 3.09 0.00 1.69 10.89 2.78 8.50 11.28 22.18
Wolverhampton 4.79 0.38 5.15 3.45 1.02 14.79 1.54 9.25 10.79 25.58
Averages 3.77 1.39 4.61 1.71 1.32 12.81 2.29 7.68 9.97 22.77
Notes to Table B
1990–91 Budgets: Total LMS spending and percentages of potential schools budget
Column 4 Potential Schools Budget. The amount potentially available for allocation through the LMS formula. Equal to the General Schools Budget (Column 1) less mandatory exceptions (Columns 2 and 3).
Column 6 Aggregated Schools Budget. The amount planned to be allocated through the LMS formula. Equal to the Potential Schools Budget (Column 4) less discretionary exceptions (Column 5).
Column 8 Limited excepted items as percentage of General Schools Budget. This measures planned spending on limited discretionary exceptions against the limit of 10 per cent. of the General Schools Budget placed on the total of these items.
Column 12 Transitional exceptions. Planned spending on activities subject to compulsory competitive tendering (mainly building cleaning and grounds maintenance). This spending will be allocated through the formula following the expiry of initial contracts.
Column 13 Other unlimited exceptions. Planned spending on advisers and inspectors, dismissals and premature retirements, and governors' insurance. Each item averages under 1 per cent. of the Potential Schools Budget.
Column 14 Total unlimited exceptions. The total of Columns 9 to 13.
Column 16 Other limited exceptions. Planned spending on all limited items other than structural repairs and maintenance (Column 15). Mainly insurances, pupils with statements of special educational need, special units, educational psychologists, education welfare officers, peripatetic teachers, pupil support, LEA initiatives, supply teaching, teachers' safeguarding allowances and contingency funds. Each item averages under 1 per cent. of the Potential Schools Budget.
Column 17 Total limited exceptions. The total of Columns 15 and 16.
Column 18 Total discretionary exceptions. The total of Columns 14 and 17.
NB.—Where percentages are totalled, slight differences may occur due to rounding.
Calderdale, Hampshire and Waltham Forest have not yet published their budget statements.
Comparisons: problem areas
Comparisons between authorities will indicate variations due to policy decisions (for example, whether to delegate or retain funds centrally) and the diversity of LEAs' areas (for example, a rural county is likely to have higher home to school transport costs than a London borough). But there will also be differences which are due purely to LMS treatment or accounting practices adopted. The following are the areas most significantly affected:
1. The scope of the General Schools Budget. There is no detailed legal definition of what items are to be included in the GSB. Circular 7/88 indicates the general principle that it should include not only direct institutional costs of schools but also indirect costs for services used by them or attributable to them.
2. Capital spending. The GSB includes spending on capital works. This item is large and will fluctuate widely from year to year and from LEA to LEA. Use of the Potential Schools Budget as the base line, rather than the GSB, largely removes any distortion.
3. Central administration. Although accounting principles recommend that all administration costs should be allocated to front-line services, authorities are free to use a variety of bases for such allocation. Judgment is required—to decide for instance what proportion of costs of central departments such as finance and personnel is attributable to education, and what proportion of the Chief Education Officer's salary relates to LMS schools. There is a large range for spending on central administration—2 per cent. to 8 per cent. of the PSB—but it is unclear how much this range reflects real differences in central bureaucracy and how much merely different accounting judgments.

Transitional excepted items. There are two possible methods of treating costs of contracts already let for activities subject to competitive tendering. Some LEAs have allocated funds through the formula but schools remain bound by existing contracts; others have retained the costs as an excepted item for the duration of these contracts. Different treatment will not affect schools' freedom but will distort comparisons.