Teachers' salaries have risen

Charles Clarke has said they can start spending more than �500m set aside for building and repairs on salaries.

They will also be allowed to start spending their schools' reserve funds in a move designed to ease the current funding crisis.

Shadow education secretary Damian Green said the changes, were a "fig leaf" to cover up the government's "spectacular cock-up" on funding.

And the unions said head teachers should not be made to choose between making repairs to buildings and paying salaries.

It is not a quick fix Education Secretary Charles Clarke What do heads think?

The new funding arrangements will be for one year only but Charles Clarke said the government would make changes in the system to make sure there was no repeat of this year's problems.

Mr Clarke said his plans would give extra flexibility to head teachers and schools.

"Money that's devolved to schools for capital spending can in this one year only be used for paying for salaries, books and equipment and so on if particular schools still have problems they need to resolve," he told BBC Breakfast.

"I'm giving extra flexibility which I think will help schools as well."

Mr Clarke denied that the move was a "quick fix" to the problem of under funding in schools.

"It is not a quick fix. It is an issue for this year only and it is me trying to acknowledge that there are some schools where there are problems and we need to give maximum flexibility to deal with them for their top priority which has to be insuring that that they've got the proper staffing to be able to teach in the way they need to," he said.

Black hole

David Hart, general secretary of the National Association of Head Teachers, said the proposals were welcome but there was still a need for more money this year.

Speaking on the Today programme on BBC Radio Four, he said: "This is going to solve the problem in the short term."

"These are the sort of things we have been pressing government to do and we are very pleased to see they have reacted in this way.

"I believe very strongly that we do need additional money this year, because so many schools are in dire difficulties.

"More important than that is the need for the government to be very clear as to how we are going to fill what we believe to be a very big black hole in the government's financial promises for the next two years."

What are they supposed to do when the boiler breaks down in the winter? Sack the deputy head? Doug McAvoy, NUT

Shadow Education Secretary Damian Green told the Commons the government had panicked and given a short-term response which took money out of one pocket in a school's budget and put it into another.

"What we should be hearing today is an apology, to heads, teachers, local authorities and parents, for the spectacular cock-up they have made of this year's education budget," he said.

"Instead, they seem determined to lay the blame anywhere else."

The Liberal Democrats' education spokesman Phil Willis said there was not a shred of evidence to back the original claim that local councils were withholding �500m from schools.

He accused ministers of spreading "disinformation" on a scale that would have "embarrassed the Iraqi information minister".

Doug McAvoy, the general secretary of the National Union of Teachers said the proposals were a "ridiculous trade-off".

"Schools should not be forced into a position where they have to choose between teachers and safe, secure, appropriate accommodation," he said.

"What are they supposed to do when the boiler breaks down in the winter? Sack the deputy head?"

Increased staff salaries, a mandatory rise in payments to teachers' pension schemes and the government's introduction of higher National Insurance contributions have left many schools short of cash for the next academic year.

But Mr Clarke said a 11.6% rise in funding should have covered increased costs.

And ministers had accused local authorities of holding back �533m designated for schools.

Where was the money?

The government held an investigation into the so-called missing millions and on Thursday gave details of its findings.

Mr Clarke held out an olive branch, saying he had received letters from every LEA and accepted that they were putting money out to schools.

"It still remains the case that some local education authorities, the majority actually, have seen bigger increases in their central schools budget than what's going out to individual schools," he said.

"The LEAs are working positively and constructively and I welcome that."

But he later named several councils which, after government pressure, had passed on more cash to schools.

Bath and North-East Somerset passed on an extra �2.3m, Bradford an additional �3.6m and Birmingham �12.5m.

Information provided by councils showed that "some local decisions have contributed to schools experiencing financial difficulties", said Mr Clarke.

The great majority, he said, had increased central budgets at a higher rate than those of individual schools.

Graham Lane, education chairman of the Local Government Association, said the freeing up of repairs money represented "the beginning of a new working relationship" between central and local government".

He added: "We want the system to be stabilised before we find a more permanent solution to the problems we have faced this year.

"Releasing some of the money put aside for repairs will allow schools to do that. It makes things more flexible.

"It's best to stop the redundancies and prepare for next year.

"I'm glad local government is now seen as part of the solution, rather than part of the problem. It takes a sensible minister to look to a solution based on the facts."