Compensation starts to hit budgets for staff and improvements as councils pass on backpay bills.
After years of careful budgeting, Christine Entwistle had managed to build up her school's bank balance to the maximum pound;50,000 allowed. Mrs Entwistle, headteacher of Walton-le-Dale County Primary in Preston, Lancashire, had planned to spend money on new computers and extra classroom assistants to improve the quality of her pupils' education.
But she has now found out that almost pound;15,000 will have to go on compensation claims for support staff, including teaching assistants and dinner ladies.
As first revealed in The TES, schools in dozens of authorities could face budget cuts to fund backpay. Lancashire schools have now been told they will have to contribute a total of pound;5.3 million before the end of the financial year.
Headteachers in Croydon, south London, will face a bill of up to pound;3 million, while schools in Staffordshire, Redcar and Cleveland, Cumbria and Sandwell are among others also expecting to be hit.
Other local authorities will finalise their compensation deals this year, leading to more claims against school budgets and reserves.
Mrs Entwistle told The TES that the decision to make schools pay was "grossly unfair".
"We wanted to target classes that need extra support, but now we won't be able to," she said.
"Schools were told to put some money aside, but I had no idea my bill would be as high as it is.
"My budget is to spend on improving children's education, not sorting out problems caused by the council."
David Fann, head of Sherwood Primary in Preston, said the situation was even worse for him as he does not have any reserves.
"I will be up to pound;22,000 overdrawn and that is a situation that I cannot manage," he said. "I will have to cut temporary contracts, which will including teaching posts. I cannot survive any other way.
"Support staff deserve more, but the way this is being managed will have serious ramifications."
Schools in Lancashire are among the first to have to contribute to equal pay claims being calculated by local authorities. The reviews are designed to compensate staff who have been poorly paid compared to other local authority workers.
Marcus Johnstone, Lancashire council's cabinet member for children and young people, said schools should pay as they employ their own staff and get funding direct from central government.
However, many local authorities have covered the back payments. In North Yorkshire, certain grades of school cooks have received a total of pound;680,000 from the council.
In Staffordshire, heads have been told to put aside 1 per cent of their budgets to cover backpay.
In Sandwell, in the West Midlands, 120 schools were told last year that a worst-case scenario could see them hit with a bill of pound;55 million if a deal could not be struck with unions representing staff. The council said it could lend money to the schools, which would then be repaid with interest over five to 10 years.
Government officials are believed to have discussed the option of schools pooling reserves so that those with more money can help those with less. This is likely to prove unpopular with schools that have saved for long-term projects.
All councils were told to carry out equal pay reviews by March last year, but so far less than half have done so and 27 per cent have yet to begin them.
Jan Parkinson, managing director of Local Government Employers, claims the process has been slowed down by no win, no fee lawyers disrupting settlements.
Workers are able to claim up to six years in backpay, but unions often negotiate deals for all members at a lower figure. Lawyers have taken individual cases to tribunal, resulting in higher pay-outs.
COUNCILS' PROMPT ACTION PAYS OFF
All councils were told to carry out "single status reviews" in 1997 to harmonise the pay of different jobs. A separate ruling in 2004 required local authorities to carry out equal pay reviews.
Many of those which had gone through the earlier process had the relatively simple task of signing a declaration that their pay scales were appropriate.
Authorities that carried out early single status reviews include Cambridgeshire, Leicestershire, West Sussex and Medway in Kent.
Those which failed to complete them before 2004 are facing higher bills. A test case that year decided that equal pay claimants can seek a maximum of six years' compensation, instead of the original two-year limit.
Authorities still carrying out the process, which could call on schools to contribute to compensation, include Bournemouth in Dorset, Oldham and Luton in Bedfordshire.