SCHOOLS WITH children from poor families are to be more fairly funded following a Government admission it is using a misleading measure of deprivation.

A London School of Economics study criticised the way the Department for Children, Schools and Families funds schools and sets pupil attainment targets. The report’s authors said it would be fairer to provide extra money to schools where pupils’ parents have few qualifications, rather than those claiming free school meals.

The number of pupils regarded as from low-income households determines a significant chunk of schools’ funding. The Government also sets lower academic expectations for these children. Schools in which a higher proportion of children claim free school meals are not expected to deliver such high grades as those with pupils from wealthier families.

This week, a Children, Schools and Families department official said free school meals were not an “ideal indicator because it’s a very blunt yesno” and that was why it was beginning to use additional indicators for deprivation.

The LSE’s Centre for the Economics of Education found entitlement to free school meals was an inaccurate and “biased” representation of socio-economic deprivation.

Children whose families were in the poorest 10 per cent of the population, claiming income support or jobseekers’ allowance, were supposed to be entitled to them.

Instead, the LSE said the measure was more likely to pick up those in the bottom 25 per cent, or from wealthier homes, with 22 per cent of children entitled to the meals coming from households with incomes in the top 75 per cent. Meanwhile, a fifth of children who miss out on the entitlement come from families with low incomes.

One of the LSE study’s authors, Dr Anna Vignole from London University’s Institute of Education, said free school meals was a misleading measure. “It’s crucial we take into account children’s family background in determining funding and understanding pupil achievement,” she said.

The Government is reviewing deprivation funding for schools, with a view to using tax credit data from April 2008 to measure deprivation down to postcode level. It will overhaul school funding entirely, to take effect in April 2011. Meanwhile, it has set aside a fund to tackle pockets of deprivation in more prosperous counties.

The Association of School and College Leaders said the LSE study proved free school meals were an inequitable measure and called on the Government to stop using it as an indicator as soon as possible.

Malcolm Trobe, the association’s president, said school leaders would be comfortable seeing parental education factored into school funding. “Children whose parents have poor education will have less vocabulary and less learning support at home,” he said.