Labour's cash raid on Ipswich schools

11.16.00am BST (GMT +0100) Wed 24th Oct 2007

Libdems condemn Government "tax on prudence" for schools

Ipswich Liberal Democrats have warned that a proposal by the government to take away cash reserves that local schools have built up could damage children's education.

The government have put out for consultation a proposal to siphon off 5% of the cash held in reserve in school budgets. Many schools build up reserves to invest in new equipment or as cover for a rainy day.

Towards the end of the last Parliamentary term, the government put out for consultation a proposal to take away 5% of the surplus cash left in each school's budget and to redistribute it to local authorities. This money, £225 million in total over 3 years, falls within the delegated budgets under which schools pay for their running costs.

The Government have a further consultation on the implementation of the 'tax on prudence' which ends on Friday 26th October

Ipswich Liberal Democrats are amazed that the government can even think of doing this. Taking money from school budgets in this way is little more than "tax on prudence" for careful schools that have planned for the future.

The government claims the money will be given back to councils to spend on education, however we suspect that all they really want to do is claim they are spending lots of new money on education; when the reality is they're spending the same money twice.

In a country with a mounting debt problem, this is hardly setting a good example about financial prudence for our school children. This is yet another example of Government interference with local decision making in Ipswich.