Charles Clarke has outlined plans to overhaul school spending to avoid a repeat of this year's cash crisis.

The education secretary announced changes to funding rules that will eventually allow individual schools to calculate their minimum funding entitlement.

In a bid to prevent a repeat of this year's funding fiasco, Clarke set out plans for a "minimum increase in funding per pupil".

Forum Response: Association of Teachers and Lecturers

Gerald Imison, ATL's Joint acting general secretary said: "At last we have a clear admission that there is a crisis in schools' funding this year. Promises of future transparency and equitable funding with significant improvements have, however, all been heard before. They will cut no ice with teachers and parents until they see adequate resources in classrooms.

"This year's fiasco has caused a total loss of confidence in the DfES's ability to fund schools properly. Today's promises do nothing to restore that confidence. Central government gives itself more control when its own control systems are quite clearly inadequate.

"On a positive note, true partnership working has shown delivery on teachers' workload. If the promises of partnership working on funding are met with equal commitment, there is a chance that the involvement of the schools and LEAs will ensure the money gets through. The downside is that yet again, when it comes to figures it all seems to get very vague. We will be challenging the government very early on this.

"It is a tragedy that Charles Clarke yet again ignores the difficulties facing schools in six weeks time - schools short of money and staff. I asked him earlier this week, even at this late stage to re-allocate departmental resources to the schools in real need. Solutions next year cannot benefit this year's pupils. I implore him, yet again, to reconsider this and demonstrate that he really does care about what happens in individual schools."

Forum Response: National Union of Teachers

Doug McAvoy, general secretary of the NUT, said: "This is a political fudge while our schools face teacher redundancies. The problem is our schools are short of funds. Because the education secretary refuses to remedy his funding mistakes, he continues to seek scapegoats whether head teachers or local education authorities.

"In January the education secretary said schools would have an additional £1.1 billion. That has now become £250 million. Charles Clarke should explain where the missing £850 million has gone but he refuses to do so.

"The shortfall of £850 million has nothing to do with transparency. It is all to do with the education secretary's incompetence and the inadequacy of the funding.

"The mechanism used makes no difference if the money is inadequate. Transparency will not provide schools with the £850 million the government has lost.

"Mr Clarke should accept the Treasury's invitation to use the £846 million left unspent last year. He has advised schools to use their reserves. He should follow his own advice and use his own."