The Department for Education "does not seem to understand the budget pressures facing schools", despite demanding that they save £3 billion, according to MPs.
By 2019-20, officials expect schools to have saved £1.3bn through better procurement and £1.7bn by using staff more effectively. But these figures have been arrived at following a "desk-based benchmarking exercise" by the DfE, the House of Commons public accounts committee has said today in a report on the financial sustainability of schools.
Schools have already been making savings, the report says, and the DfE does not appear to have any plan to monitor how schools will make additional savings, or what the impact will be on children's education.
The committee warns that schools spend half of their budgets on classroom teachers and reducing costs is likely to lead to bigger classes, a heavier reliance on unqualified staff and more teachers teaching outside their specialism. Headteachers and other senior staff will also be required to do more teaching, it adds.
The report says: "The DfE does not have the necessary arrangements in place to identify, and therefore act, if the actions schools take to make efficiency savings threaten the quality of educational outcomes."
It highlights that schools are already facing the most significant financial pressure since the mid-1990s and that funding per pupil is reducing in real terms.
Headteachers told the committee they had already made wide-ranging savings in areas including maintenance, recruitment, equipment, support staff and pastoral services.
The report says: "We are concerned that the department has not spoken enough to schools to understand what savings they can realistically make."
The DfE has not taken into account the extra costs created by government policies such as curriculum and assessment changes, and the removal of the £600 million per year Education Services Grant.
Committee chair Meg Hillier said today: “Pupils’ futures are at risk if the DfE fails to act on the warnings in our report.
“It sets out more evidence of what increasingly appears to be a collective delusion in government about the scope for further efficiency savings in public services.”
The department “must not be deaf to the experiences of headteachers”, she added.
A DfE spokesman said: "We will study the report’s recommendations and respond in due course.
"We have protected the core schools budget in real terms since 2010, with school funding at its highest level on record at more than £40bn in 2016-17 – and that is set to rise, as pupil numbers rise over the next two years, to £42bn by 2019-20.
"These protections, and the wider investment in the school system, mean that spending per pupil will be over 50 per cent higher in real terms in 2020 than it was in 2000, as set out by the independent Institute for Fiscal Studies.
"We recognise that schools are facing cost pressures and we will continue to provide support to help them use their funding in the most cost-effective ways, so that every pound of the investment we make in education has the greatest impact."
Teaching unions welcomed the report. Malcolm Trobe, interim general secretary of the Association of School and College Leaders, accused the DfE of "repeatedly stating that school spending is at record levels when it is fully aware that this is only because of rising pupil numbers".
Russell Hobby, general secretary of school leaders’ union NAHT, called the report "damning", while Kevin Courtney, general secretary of the National Union of Teachers, agreed with the committee that the DfE's expectations were "delusional".