Head teacher Eurig Davies has concerns about his budget

Elwa, the body responsible for post-16 education in Wales, is looking at new measures to try to close the funding gap between schools and colleges.

Heads will get an indication in August of how much they will get per pupil.

But they and some teaching unions are worried that they will have to cut staff under the new system.

Heads are not sure where the money is coming from at the moment in terms of how much money they are going to get per pupil Elaine Edwards, Ucac

Ysgol Gyfun Ystalyfera in the Swansea Valley is losing teachers this summer, even though it will see its number of pupils increase by 37 this September.

Head teacher Eurig Davies told The Politics Show on BBC 1 Wales he had had to cut �100,000 from his budget because of changes in the way the local education authority funded schools.

"We've had compulsory redundancies in school to bring us into line with the county average," he said.

"We've also had to make reductions in non-teaching staff; we've had a reduction in the nurse's hours, for instance.

"It has been a difficult time across the board because we want to maintain our standards."

He said the problem was compounded by concerns about sixth form funding arrangements due to be introduced from August 2005.

We want to introduce a system of funding that is going to be fairer to everybody Sheila Drury, Elwa

Mr Davies said his school had �4,000 for each of the 180 sixth form pupils at present, which gave him a budget of �720,000.

Bilingual schools

"If the Elwa funding mechanism does not give me the same amount then we will have to strive very hard to make sure that all youngsters are provided with the kind of education they deserve and need for their future lives," he added.

Elaine Edwards of the Welsh teaching union Ucac said she had concerns a new system would not take into account the funding needs of rural and bilingual schools.

"Heads are not sure where the money is coming from at the moment in terms of how much money they are going to get per pupil.

"It's a difficult position to be in if you are talking about planning ahead for education for your school.

"Elwa shows no understanding of complex issues in rural Wales and complex issues regarding teaching through the medium of Welsh."

Sheila Drury says 85% of school budgets are teachers' costs

But Elwa chairwoman Sheila Drury said the new system would be fairer.

"We want to provide more learning opportunities for all 16-year-olds," she told The Politics Show on Sunday.

"We want to introduce a system of funding that is going to be fairer to everybody.

"We are going to have one year minimum, and I believe longer, for schools, colleges and training providers to look at what we are proposing and, by the way, we are suggesting weighting for people in rural areas.

"There are different funding levels across all the local authorities in Wales.

"What we are trying to do is bring them all into reasonable harmony.

"What we can do is maintain the level of funding but increase the rate at which we give funding to those who do not have as much money at the moment.

"You have to bear in mind that 85% of school budgets are teachers' costs - and teachers' costs are set nationally.