Between a third and half of the extra money intended for deprived pupils does not actually reach them, an influential parliamentary committee revealed this week.
The report from the Commons Schools Select Committee paints a gloomy picture, warning that the recession means schools need to plan for a “much more austere future”.
But the disadvantaged pupils who are in greatest need of extra help will be the hardest hit, say the MPs.
They quote research undertaken by the Institute for Fiscal Studies last year which reported that children on free school meals received more than 70 per cent additional national funding compared to other pupils - Pounds 1,500 each in primaries and Pounds 2,400 in secondaries.
But the institute found that only between 40-50 per cent of the premium was actually passed on to the schools with those pupils once the money had been through local authority funding formulas.
Ed Balls, the Schools Secretary, told the MPs his department had calculated that about two-thirds of the money did reach targeted schools.
“That is one of the things that we will need to look at in the review of school funding that we are now starting,” he told them last summer.
“But we are not seeking to centralise education funding and to take away that discretion.”
This week, the committee said the Government’s desire to create stability in school funding conflicted with provision of increased funding for deprived areas.
It concluded that the recession would mean that when the next three-year funding deal was announced, “stability is likely to win again over any redistribution based on deprivation or other needs”.
The Conservatives and Liberal Democrats have pledged to tackle deprivation funding with “pupil premium” policies that attach extra money directly to disadvantaged pupils. This automatically goes to whichever school they attend. But the Tories have not yet explained how they would fund the policy.
Christine Blower, general secretary of the NUT, said she was “deeply concerned” that schools in deprived areas were not receiving their full share of funding.
The committee report also warned that the economic downturn could undermine the Pounds 45 billion Building Schools for the Future programme by deterring companies from getting involved in the private finance initiatives used to fund 60 per cent of the scheme.
The MPs called for the Government to make a “clear statement” on the future of the plan.
They also raised concerns about the “confusing” way the Department for Children, Schools and Families presented its expenditure figures, saying it often altered targets before their end date, making it impossible to track progress.
The committee said it was also “disappointed” with the “vague” information from the DCSF about how it achieved Pounds 4.46 billion in efficiency savings.
