Remember the fanfare four years ago when Tony Blair launched the Excellence in Cities programme? As the Prime Minister put it at the time: 'successive governments have failed to resolve the educational problems of the major cities. Standards have been too low for too long.? Things would now be different: the £800 million scheme would ?make excellence for everyone a reality rather than just a slogan?.

But according to the findings of an Ofsted report leaked to The Times, the real impact of the scheme has been rather different. Having grown from an initial six cities in 1999 to cover 58 local education authorities (LEAs) today, its main impact has been to provide further proof of that most pervasive of all laws of public policy: the law of unintended consequences. According to Ofsted, Excellence in Cities has produced ?little or no improvement in pupils? results?. Rather, it has made children ?feel better about underachieving at school? ? precisely the reverse of the intention.

Take the current mess over schools. In last July's Comprehensive Spending Review, Gordon Brown announced ?the biggest sustained rise in education spending for a generation? ? 6 per cent a year, to £58 billion in 2005-06. Local education authorities licked their lips in anticipation.

But they reckoned without the law of unintended consequences. The impact of all this extra money is that LEAs are to lose their main function. Despite the extra billions, teachers are being laid off, and schools are closing because they cannot afford to stay open. The Government blames the LEAs for holding on to too much money and it is now preparing to bypass them altogether, moving towards direct funding of the 25,000 state schools.

It's understandable that politicians seek to change the status quo with ?initiatives? that they direct. Understandable, but wrong. Since good teachers are a prerequisite for a good school, the Government has put more money into salaries, working on the principle that if you pay peanuts you get monkeys. But the result has not been a flood of new teachers, let alone the high-calibre applicants needed. The reason? Even with five years? experience, and despite the extra funding, a teacher today can still expect to earn only £26,460 a year. But since that's the salary level the Government decides on, that's the only salary available. It doesn?t matter what a school thinks it can manage to pay, or what it considers the most sensible way to allocate its resources.

All the current problems, as well as the more basic flaws in the system, stem from the top-down approach that was encapsulated in a maxim of Douglas Jay, the late Labour Cabinet minister: ?The gentleman in Whitehall really does know better what is good for people than the people know themselves.? On Sunday, for instance, Charles Clarke said that he would like to see museums run schools ? Tate Modern College, Whitworth Academy and Arnolfini School, perhaps. It seems like a good idea, except for one flaw: who is Mr Clarke to decide what schools are needed, and where? The one lesson which screams out at us from the past is that there are two groups that ought to be excluded from any role in the development of new schools: politicians and bureaucrats.

The only people who should decide what is needed are parents and teachers. Two years ago I visited a school in Harlem, the Sisulu Children's Academy. To reach it, one must pass by crack dens and muggers. I was taken in a police car. There can be few less propitious spots for a school. Yet the pupils are all in smart uniform, discipline is strict and effective and when I visited, the children were chanting their Latin declensions. It has one of the best academic records in the city.

Left to bureaucrats and politicians, the Sisulu Academy would not exist. It is a charter school ? a school created by parents because they wanted their children to have the opportunity of attending a school that did more than act as a cattle shed. The local school board fought its creation with every legal weapon it had.

But Harlem was a pioneer of school choice, which gives all parents, not just the wealthy, power to decide how and where their kids should be educated. And because money follows the pupil, and goes directly to the school, the heads, rather than bureaucrats and educationists, decide how and where that money should be spent. Teachers are paid what the head decides to pay them, not what the Government tells them to.

The irony is that the Government knows all this; it just can?t bring itself to admit it. The current plans within the department to bypass LEAs and fund schools directly, for instance, aren?t even new: all the extra money given to schools in the last Budget was earmarked to go directly to them, specifically to avoid the historic problem of LEAs retaining money that is best spent by schools themselves.

Last month, the Mayor of Milwaukee, John Norquist, was in London to proselytise his city's choice programme. Every parent who wants one is given a voucher equivalent to the money that would be spent on educating his or her child. Parents can then use that voucher almost anywhere they wish. Standards in all Milwaukee schools ? especially those in deprived areas ? have risen dramatically.

Since the main beneficiaries of improved state school standards are the poor, it shouldn?t be surprising that Mr Norquist is a Democrat. He was met with fascination in Downing Street.

But with Labour still unable to see that central initiatives aren?t the solution but the problem, the chances that Labour will hand power to parents must be slim to nonexistent. And we?ll all have to carry on living with the effects of the law of unintended consequences.

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