Government's £225M raid on school budgets outrageous

10.15.41am UTC (GMT +0000) Mon 15th Oct 2007

The Liberal Democrats have called for new Government plans to take £225million out of the cash reserves of up to 20,000 English schools to be scrapped. In the first year this will be based on cash surpluses in schools at 31st March 2006, irrespective of whether the schools have since spent the money. The Liberal Democrats have called for the plan to be scrapped, arguing it:

· Penalises prudent schools

· Penalises schools which are saving up to fund a major capital project, such as new buildings

· Penalises schools if they have spent surpluses since 31st March 2006

· Creates an incentive for schools to spend money quickly, thereby undermining long-term planning.

David Laws, Liberal Democrat Education spokesperson said "This is the economics of the mad house. At a time when the growth of the schools budget is to be cut in half, it is absurd to be penalising schools who manage their budgets prudently. The Liberal Democrats will oppose these regulations when they are brought before Parliament."