Schools must spend 2010 tightening their belts in preparation for “tough times ahead”, union leaders have warned.

The prospect of swingeing cuts to public expenditure in 2011 following a decade of real-terms funding increases will force heads to look at ways to protect their budgets in the coming year.

Despite Chancellor Alistair Darling pledging real-terms funding increases of 0.7 per cent between 2011 and 2013, teachers’ leaders said that with the Comprehensive Spending Review period coming to an end, schools should spend this year bracing themselves.

Equally, the possibility of a change of government will spell bleak times ahead for schools, with the Conservatives refusing to ring-fence school spending and pledging a pay freeze on teachers’ pay for a 12-month period.

John Dunford, general secretary of the Association of School and College Leaders, said recruitment and retention of staff will be one area to paying close attention to.

“This year, schools will be preparing for tougher times ahead,” he said. “They will be looking very carefully at whether they replace people who are leaving, and whether they should postpone their much-loved projects.”

Dr Dunford will also tell his members in the union’s monthly newsletter later this month that funding is “one area where change is certain and it does not look to be a happy picture”.

“The unprecedented real-terms funding increases of the last 10 years will soon have the rosy glow of the past as we face the reality of public expenditure cuts in 2011, whichever party is in power,” he added.

According to teaching union the NUT, tighter budgets will mean schools will be forced to establish partnerships with other schools with an aim to share resources.

John Bangs, head of education at the NUT, said: “It will be absolutely vital to establish networks and clusters - not simply to share expertise but to allow schools to think collectively as institutions on how to use their budgets in a time of hardship.”

Mr Bangs’ words echo Schools Secretary Ed Balls’ own wishes for the coming year. Mr Balls identified federations as a means of saving “significant sums of money”, which can be reinvested into the frontline. Speaking to The TES in November last year, he told schools to federate or be forced to axe staff as budgets become tighter in the years to come.

Full preview of the year, January 8 issue.