Leaders fear the government’s expansion of free school meals (FSM) will result in significant funding cuts for highly disadvantaged schools.
The warnings come as schools are being asked to plan budgets without knowing how the government will deliver planned reforms to disadvantage funding.
All children in households receiving universal credit became eligible for FSM in September.
However, the government introduced two categories: "targeted" FSM, retaining the previous £7,400 earnings threshold; and "expanded" FSM, for families receiving universal credit whose income exceeds this threshold.
Both groups receive free meals, but pupils newly qualifying under the expanded category do not attract pupil premium funding.
Under the existing Ever 6 system, pupils continue to attract pupil premium funding for six years after they were last recorded as eligible for FSM. However, children newly qualifying for expanded FSM will not be in the Ever 6 cohort.
Potential funding losses
Mo Chatra, chief financial and operations officer at Academy Transformation Trust (ATT), which runs 21 schools across the East Midlands and East of England, said schools with higher proportions of disadvantaged pupils could be hit particularly hard by the changes.
“For a trust like ours, which does have higher-than-average disadvantage and therefore greater levels of pupil premium, we potentially stand to take a financial hit,” he said.
ATT had not yet modelled the financial impact, Mr Chatra said, calling for clearer guidance from the Department for Education on future allocations.
Benedicte Yue, CFO at River Learning Trust, which runs 31 schools across Oxfordshire and Swindon, said eligibility checks at the beginning of the academic year found many previously eligible pupils were now being classified as expanded rather than targeted FSM.
The eventual expiry of historic Ever 6 eligibility could have significant implications for school funding, she warned.
“Unless the government fundamentally reforms disadvantage funding, we are looking at an impending cliff edge leading to a dramatic drop in pupil premium,” she said.
River Learning Trust received £3.9 million in pupil premium funding across its schools in 2024-25, and ATT received £5 million.
Neither trust has quantified any potential losses, which will depend on pupils’ eligibility histories and future government funding reforms.
A headteacher at a local authority-maintained school in the East Midlands told Tes the uncertainty was making it difficult to plan its three-year pupil premium strategy, including funding smaller classes in core subjects.
Subsidising free meals
The additional costs associated with the FSM expansion have also strained school budgets, leaders warned.
“The government gives us £2.66 per meal, but industry data shows a healthy, compliant school meal costs roughly £3.16 to produce,” Ms Yue said.
Pepe Di’Iasio, general secretary of the Association of School and College Leaders, said: “While the free school meals expansion has been a positive step, it does require careful management and regular review to ensure that schools are not left worse off.”
He added: “We remain concerned that current funding is not sufficient to meet costs and some schools are being forced to cover the excess from their own budgets.”
Trusts with outsourced catering contracts could face particular difficulties controlling rising costs, Mr Chatra warned.
Calls for funding reform
The government’s schools White Paper proposed reforming pupil premium and the national funding formula’s deprivation funding to better reflect levels of poverty.
Ms Yue welcomed the proposals but called for greater funding weightings for persistently disadvantaged pupils, and for geographical inequalities to be taken into account.
And Mr Chatra said pupil premium changes should be considered alongside wider national funding formula reform, arguing the two funding streams could be more closely integrated.
Mr Di’Iasio added: “There will also need to be a review of the pupil premium grant. It’s vital that schools are provided with the funding they need to support their most vulnerable pupils.”
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