Ministers have been warned about the financial pressures facing rural schools as it emerged that Cumbria County Council is proposing to claw back money from schools to plug an £8 million projected overspend on special needs.

The council said that changes to the way pupils with SEND are funded has resulted in an 80 per cent rise in the number of requests from schools to help children with education and healthcare plans - which have replaced statements of educational need. It says the shortfall is made up of a £6.5 million projected overspend in this financial year and £1.5 million from the year before.

School leaders said that Cumbria County Council has contacted schools to propose that one way to address the shortfall would be for all schools to cut their budgets, this year and next.

But heads and governors, who set their budgets in March, have said that the proposal could lead to redundancies and will not solve the problem in the long term.

The Cumbria schools forum, as reported in the News & Star, has suggested that increasing the number of “alternative provision” places in Cumbria, rather than sending pupils to schools outside the county, could help reduce costs.

Local authorities receive funding for schools in three blocks: the early years block for pre-school provision, the schools block that is passed directly to schools, and the high-needs block that funds special schools and pupil referral units.

A council spokesman said: “A wide range of proposals are currently with the Schools Forum for consideration and further proposals are being developed in response to feedback received to date. These will also be subject to consultation before the Schools Forum makes a recommendation to the Council’s Cabinet on what they consider to be the best way forward. No decisions have been made yet and all options remain on the table.

“We are working closely with schools on this issue to find a way forward. We have to recognise that pressure on the budget reflects an 80 per cent rise in the number of requests from schools for assessments of children leading to an education and healthcare plans (EHCP) over the past two years, these requests are based on the needs that children have and we have a duty to meet them. Inevitably this large increase has an impact.”

High needs is allocated to local authorities for use on SEND placements and services, alternative provision and hospital education.

Russell Hobby, general secretary of the NAHT heads’ union, said: “SEND is not funded adequately and so schools are being faced with asked to contribute to councils’ overspend.”

Changes to the national funding formula are being proposed and the high-needs formula, is part of that, but Mr Hobby added: “SEND funding is not keeping pace and I think we will face more of these budgets falling short.”

The news comes as a survey by education finance specialist HCSS Education found 93 per cent of rural-based school leaders felt their school was unfairly funded compared to 58 per cent of schools in urban areas. The survey, based on 142 schools in total, found that for two-thirds of schools and academies, managing budgets has become significantly more difficult, but for rural school leaders this rose to 81 per cent.

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