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Local councils in England claim they are losing millions of pounds to allow the government to pay for schools to convert to academy status.

Their grants are being cut because these privately-run but state-funded schools will not use the services councils provide to state schools.

The Local Government Association claims ministers are reducing council grants by £350m more than they will save.

The government said the double funding of services was not sustainable.

Local education authorities face cuts of £413m over the next two years tied to the expansion in the academies programme.

However, Department for Education figures suggest they will only save a maximum of £60m from the changes if 200 schools convert to academy status each year.

This would leave them about £350m out of pocket, says the LGA.

Its chairman Baroness Margaret Eaton said: "We have made it clear that school choice is something that councils support. But it cannot be fair for local taxpayers to subsidise the roll-out of the academies programme.

"As it stands, councils face a bill of £413m at a time when their budgets are already facing an unprecedented squeeze.

"This is unacceptable when the saving from not having to provide central services to academies is less than one seventh of that amount.

"Whatever you think of academies, it cannot be right that other frontline services suffer so that the government's academies programme can flourish."

She called on the government to think again about how it pays for academies to be set up.

'Top slice'

The claims were supported by the F40 group, which campaigns for fairer funding of education.

Its chief executive Gillian Hayward, who chairs the Gloucestershire Schools Forum, suggested the additional money for academies was being "top-sliced from the money which should be available for all schools".

She added: "Such practice would also be at odds with government indications that there should be no financial incentive or disincentive to a school becoming an academy.

"Executive members of F40 believe that there is now a significant financial advantage to academy conversion, and that this is unfair to the entire education sector and in particular to low-funded local authorities and the schools in them."

A Department for Education spokesman said: "Previously local authorities did not lose funding for certain services when schools under their charge became directly funded academies.

"This meant that there could effectively be double funding for some services. Clearly this situation represented poor value for money and was not sustainable in the current fiscal climate."

He added that funds were being deducted from council grants to address this.

He said it was not possible to say precisely which schools in which local authorities would convert to academy status, so it was not practical to target the reductions at individual local authorities, "and therefore a national top slice has been applied".

"This means that all local authorities will have certainty over the funding they will receive over the period and will not see unpredictable changes because of variable patterns in the growth of the academy sector."

Chris Keates, general secretary of the Nasuwt teaching union, said local authorities were being financially crippled and "the whole school system sacrificed for an ideologically-driven strategy".

She added: "Taxpayers should be outraged at the amount of money being poured into academy schools which do not, according to international evidence, improve academic standards, and will only lead to division and segregation."