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JUDITH JUDD Education Editor Councils will have to choose between squeezing spending on other services and making teachers redundant.Ministers say school spending should rise by 4.5 per cent, compared with an increase of 3.3 per cent in overall spending.Education spending is not ring-fenced, so councillors must decide whether they are prepared to allow larger class sizes or to close old people's homes.The Government's strategy is to divert the anger of parents and governors - who last year campaigned so vigorously against cuts - away from itself and towards local councils.Under new rules announced by John Gummer, the Secretary of State for the Environment,Government restrictions on what councils can spend - the cap - will be eased for all councils by between 1.5 and 3 per cent.Councils which are also local education authorities will be able to break their cap if it is below their standard spending assessment - the amount the Government says they should spend.Kenneth Clarke, the Chancellor, told the Commons on Tuesday that parents must insist that money intended for education was spent on schools.But Simon Goodenough, chairman of the National Governors' Council, said: "Governors and parents don't want education to be boosted at the expense of other vital services."The full picture for schools will not be clear until next spring, when the teachers' pay award is decided. Most will get a real terms increase of 0.5 per cent from the extra pounds 777m being distributed, although two, including Camden and Islington and Manchester, are to face a spending freeze.. On top of that is the ring-fenced extra allocation of pounds 418m for community care, a recognition of the rising numbers of elderly people.Martin Pilgrim, Under-Secretary for Finance at the Association of Metropolitan Authorities, said last night: "We might just be able to protect education and the social social services from further cuts this year. But we will not be able to protect other services."The Local Government Information Unit, a group funded by local authorities and trade unions, predicted the package would lead to council tax rises averaging 7 per cent - or around pounds 40 on the average pounds 543 council tax for Band C houses in England.The local authority settlement came as Stephen Dorrell, Secretary of State for Health, announced health authorities' allocations for the coming year. But local authorities said yesterday they were already spending pounds 2.1bn above the level the Government specified for last year, so that the increase does not even bring them up to existing levels of spending.But while John Gummer, the Secretary of State for the Environment, is allowing councils a 3.3 per cent increase in the amount he believes they need to spend, Government grant to local government is rising by only 2.8 per cent. These have narrowed between the north and the south during the recession.Government spending figures allow councils overall an increase of 3.3 per cent or pounds 1.4bn on total standard spending - the amount the Government believes they need to spend. No extra spending at all has been allowed for highways.The Department of the Environment said the capping regime reflected ministerial priorities of boosting education and the police during what had been a "very tough" spending round across the rest of government.The settlement could also lead to sharp council tax increases in London, with inner London authorities limited to a 1.5 per cent spending increase but set, along with other councils in the south-east, to lose pounds 150m because of adjustments designed to take into account regional differences in earnings.

NICHOLAS TIMMINS Public Policy Editor Higher council tax and reductions in services were predicted yesterday by Frank Dobson, Labour's local government spokesman, as ministers changed council capping rules in an attempt to ensure that the extra pounds 774m for education actually reaches schools.Capping rules have been set so that the extra amount councils can spend is at least as much as their share of the extra cash for education, plus the pounds 235m intended for the police, the pounds 63m - a 1.1 per cent increase, well below inflation - set for social services and an extra 1.5 per cent, or pounds 17m, for fire services.But in allowing county councils and the new unitary authorities to increase spending by their share of that sum, or 3 per cent - whichever is the greater - and allowing metropolitan authorities and the outer London boroughs a 2 per cent increase or the extra cost of the fire, police, education and social services spending, ministers have cracked down hard on district council spending.The standard spending assessment - the amount the Government believes councils should spend - has been cut by 2.5 per cent, while they will be capped if spending is increased by more than 0.5 per cent. If they opt for a ballot on industrial action, it would take a month to complete and any disruption would therefore not take place until the new year.. However, management should be aware that their employees are very concerned about working time."While Dagenham and other small Essex plants have overwhelmingly rejected the proposed settlement as part of a consultation process, other works such as Halewood on Merseyside and Bridgend in South Wales are minded to accept the package.Union representatives are due to meet on 12 December to assess the mood of the company's 22,000 blue-collar workers. Vauxhall management has offered its 9,000 manual workers 3.5 per cent this year and an increase matching the inflation rate next year. Both Ford and Vauxhall have refused to address claims for a reduction in the working week from 39 to 37 hours.Steve Hart, district officer for the Transport & General Workers Union at Dagenham, said his members were convinced that the 9.25 per cent Ford offer did not compensate them for a considerable improvement in productivity."The offer does not meet the claim. If management proposed a 10 per cent increase and there was no concession on hours, they might be prepared to accept.

The party has been warned that if local government workers' aspirations are not met immediately, they will resurface under a Labour administration.In the motor industry, Ford workers are waiting the outcome of fresh talks at Vauxhall scheduled for next Wednesday - the same day as an overtime ban is due to begin. BARRY CLEMENT Labour Editor Workers at Ford's biggest plant in Dagenham yesterday overwhelmingly rejected a pay offer worth a minimum of 9.25 per cent over two years.More than 92 per cent of the 9,000 blue-collar workers at the Essex works, who make up nearly half of Ford's British workforce, voted to turn down the deal which gives 4.75 per cent in the first year and 4.5 per cent in the second year or the increase in the Retail Price Index plus 0.5 per cent, which ever is greater.The news came as 1.5 million local authority employees tabled a claim for a pounds 4.15 minimum wage as part of a package that would add an estimated 6 per cent to the pounds 9bn pay bill.While public service unions are seeking the increase from next April, it could hold serious implications for the Labour Party if it forms the next government in 18 months time. Of the 129 survivors, 61 (47 per cent) were men and 30 (23 per cent) were smokers.Analysis of the individual diets showed that for those who ate more of the components of the traditional Greek diet, there was a 17 per cent reduction in mortality.Their diet - low in saturated (animal fats), high in mono- unsaturated fats, high in complex carbohydrates (from grains and legumes) and high in fibre (fruits and vegetables) - was naturally rich in protective antioxidant vitamins A, C, E, beta-carotene, important minerals and other chemicals, like polyphenols and anthocyanines, associated with good health.This may explain the paradox that people living in rural areas of European Mediterranean countries smoke heavily and have poor access to medical care, but generally survive to a good age.. Fresh fruit was a staple.Milk intake was low but cheese and yoghurt was high. Feta cheese was added to salads and vegetable stews.Meat was regarded as too expensive by most villagers, who preferred fish.According to the report, in the British Medical Journal, wine was consumed in moderation and almost always to accompany food. None of the pensioners was a heavy drinker: no man drank more than seven and no woman more than two glasses of wine a day.During the six-year study, 53 people died - 30 (57 per cent) of them men - and 17 (32 per cent) of them smokers. LIZ HUNT Health Editor The simple diet followed by Greek peasants is the key to a long and healthy life and may protect against known health hazards such as smoking and lack of medical care, according to a study.The Greek variant of the Mediterranean diet - which was first identified as beneficial to health more than 20 years ago - combines the best of current scientific knowledge on healthy eating.But Dimitrios Trichopoulos, from the Harvard School of Public Health, who analysed the diet of 182 Greek villagers aged 70 and over, says that it was the "overall dietary pattern" which explained their longevity and general good health.Their diet included wholegrain bread, potatoes and other cereals.They ate cooked meals and soups, and salads rich in olive oil and accompanied by beans, lentils and vegetables were consumed in sizeable portions.