It says that many "are not yet fully prepared to meet the challenge" of raising school standards.

A survey of 1,500 schools and 27 local education authorities, carried out by the commission, found that the services provided by authorities varied widely in terms of quality and cost.

The report, entitled Held in Trust: the LEA of the Future, suggests that councils need to "invest in developing their relationships with schools" and should target resources more precisely where schools need support.

Spending per pupil varies widely

It also calls for closer attention to be paid to offering schools value for money. For example, the survey found that expenditure on financial services for schools varied among local authorities from �56 to �8 per pupil.

The survey also highlights the differences in spending on educational advisers which offer support services for teaching, ranging from �27 to �193 per pupil.

The quality of services was questioned by the report, which asked school staff how they rated local authority personnel departments. While in some authorities staff had a high opinion of personnel services, in one authority only a quarter of staff said that services were good or very good.

The report acknowledges that there is uncertainty among some local education authorities about their future role. Successive initiatives have strengthened the independence of schools, often at the expense of the involvement of local authorities.

From once controlling the majority of school budgets, local authorities are now only responsible for a minority of school spending.

The School Standards Minister, Estelle Morris, welcomed the report.

"The report highlights the importance of the publication of clear data on what local education authorities spend," she said.