Local education authorities are responsible for most of the public expenditure on schools.

A large amount is indirectly funded by the government through the Revenue Support Grant made to local authorities. They are free to decide how much of this grant should go to education and the other services they provide - albeit under severe political pressure to pass on to schools what is intended for them.

There are also central government grants supporting spending by local education authorities. These focus mainly on training to improve schools' performance in literacy and numeracy, and on support for information technology.

State school funding

There were four kinds of state school wholly or mainly supported from public funds:

• County schools, owned and wholly funded by local education authorities and providing primary and secondary non-denominational education.
• Voluntary schools, mostly established by religious denominations but financially maintained by the local education authority. Those which assumed greater financial independence and more control over admissions policies were known as ''voluntary aided'', as opposed to ''voluntary controlled'' schools, where the local education authority bore all costs.
• Special agreement schools, where the local education authority might pay between one-half and three-quarters of the cost of building a new voluntary school or extending an existing one, almost always a secondary school.
• Self-governing grant-maintained (GM) schools, which had opted out of local authority control.

Under the former Conservative government, all secondary and primary schools were eligible to apply for grant-maintained status, subject to a ballot of parents.

These GM schools enjoyed a greater degree of independence over their admission policies. They were not financed by local education authorities. Instead, they were funded directly by the Welsh Office.

Changes

Under the Schools Standards and Framework Act 1998, the government established three new categories of schools:

• community, very broadly based on county schools
• voluntary, formerly voluntary aided and voluntary controlled schools
• foundation, intended to replace GM schools, putting them back under local authority control to an extent.

Extra funding

In July 1998, the then Welsh Education Minister, Peter Hain, announced a �730m package over three years to be invested in education, with particular emphasis on frontline support for teachers, higher standards and more student places in further education.

The new National Assembly for Wales will decide how best to spend the money.

In June 1998, the Welsh Office published a consultation paper on the biggest reform of school funding for a decade. Entitled Fair Funding - Improving Delegation to Schools, the consultation document outlined plans to transfer control over around an extra �100m annually to individual schools from local authority budgets.

Criticism of the tight timescale persuaded Peter Hain to put back implementation of the changes by a year to April 2000. Schools took on additional responsibilities for repair and maintenance, school meals, management, curriculum services and teacher supply cover.

The effect is to bring all schools closer in line with the new foundation schools. Many people in Wales were disappointed that these previously grant-maintained schools have been allowed to keep some of their distance from local authorities.

With only 17 such schools in Wales it had been thought that the new Welsh Office administration might have adopted a more radical policy on the issue than in England.

Repairs backlog

In the past, councils have introduced cuts, and teaching jobs have been lost. There are calls for reform on this issue, to guarantee that tightening of finances at local government level does not lead to cuts in education budgets.

Some �13.3m has been made available in 1998-99 to pay for school building repairs and security improvements. Six hundred schools were due to benefit, but there is a huge backlog of essential repairs in Welsh schools, running into hundreds of millions of pounds.

At the same time, teaching unions are asking for substantial pay rises to boost recruitment.

Governing bodies

All publicly-maintained schools have a governing body, which is usually made up of a number of parent representatives, the headteacher and serving teachers, and governors appointed by the local education authority or church authorities.

Schools can also appoint up to four ''sponsor governors'' from the business world, who are expected to provide financial and managerial assistance.

Governors are responsible for the main policy decisions within schools, including academic matters. They also shoulder responsibility for school discipline, and the appointment and dismissal of staff.

Governing bodies are responsible for implementing the recommendations of inspection reports, and are required to make those reports and their resulting action plans available to parents.