Estyn is Wales' schools inspection service

NUT Cymru claims more than �2m has not been spent by the body and handed back to the Welsh Assembly Government.

The union criticised Estyn's actions at a time it claimed schools in Wales were "struggling with inadequate funding".

The assembly government said where underspends occur, funds can be "held in reserve and deployed to educational and other priorities as they emerge."

According to the National Union of Teachers (NUT) in Wales, Estyn's funding increased by 15.5% in 2005 compared with the previous year.

The funds are held in reserve by the assembly and deployed to key educational and other priorities as they emerge Welsh Assembly Government statement

The union said that according to Estyn's end of year accounts, �2.1m was transferred back to the assembly government.

Gethin Lewis, secretary of NUT Cymru, said: "Schools in Wales struggle with inadequate funding and many local authorities are having to consider cutting their education budgets which could lead to staff redundancies and school closures.

"So what a change it was to read of an education body which actually received an increase in net expenditure of 15.5% compared to the previous year.

"So generous was this funding that Estyn could not spend it all. It transferred �2.1m back to the Welsh Assembly Government."

'Good use'

But the assembly government said in a statement that the money returned due to the underspend could be put to use elsewhere.

The statement read: "The budget allocated to Estyn is determined as part of the assembly budget planning round process, when all budgets are reviewed and the need for future expenditure is decided.

"Ministers do look closely at previous spend when deciding on future settlements but this is by no means the only matter that determines the future budget level.

"Where underspends arise there are ample opportunities to make cases for putting the resources to good use in a year.

"Otherwise, the funds are held in reserve by the assembly and deployed to key educational and other priorities as they emerge."

The statement added that decisions on education spending are taken by local authorities in Wales and any underspend by Estyn would not directly transfer to schools.

Estyn is the office of Her Majesty's Inspectorate for Education and Training in Wales.

The body is responsible for inspections of schools and training providers and reporting on standards.