The Education Act 1902 (2 Edw. VII), also known as the Balfour Act, was a highly controversial Act of Parliament that set the pattern of elementary education in England and Wales for four decades. It was passed by the Conservative Party and was supported by the Church of England, and opposed by Nonconformists and the Liberal Party.. The Act provided funds for denominational religious instruction in voluntary elementary schools, owned primarily by the Church of England and Roman Catholics. It ended the divide between voluntary schools, which were largely administered by the Church of England, and schools provided and run by elected school boards, and reflected the influence of the Efficiency Movement in Britain. It was extended in 1903 to cover London.
The Act was a short-term political disaster for the Conservative Party who lost massively in the 1906 general election. However Searle argues it was long-term success. It standardized and upgraded the educational systems of England and Wales, and led to a rapid growth of secondary schools, with over 1,000 opening by 1914, including 349 for girls. The Church schools now had solid financing from local ratepayers and had to meet uniform standards. Eventually, the Anglican schools were nationalized.
The "Cockerton Judgment" of 1901 caused a crisis by undermining the legality of "higher grade schools" for children over 12. A temporary fix allowed the schools to operate one more year. A second issue involved the 14,000 church schools, called "voluntary schools", run chiefly by the Church of England and including some Catholic schools. They were poorly funded and did not receive local tax moneys, but they educated a third of the school children. There were too many overlapping jurisdictions, with 2568 school boards set up by the Elementary Education Act 1870, as well as all existing School Attendance Committees. These were all abolished with their duties being handed over to local borough or county councils, as local education authorities (LEAs).
There were now 328 LEAs, which set local tax rates. The LEAs could establish new secondary and technical schools as well as developing the existing system of elementary schools. These LEAs were in charge of paying teachers, ensuring the teachers were properly qualified and providing necessary books and equipment. They paid the teachers in the church schools, with the churches providing and maintaining school buildings and providing the religious instruction.