£2.5bn fund aimed at helping to educate children from poorest families

SCHOOLS funding is set to increase over the next four years allowing the Government to provide a new 2.5bn pupil premium for poor children.

Chancellor George Osborne announced that the schools budget will increase from 35bn to 39bn over the spending review period – a 0.1 per cent increase in real terms every year.

He told the Commons other government departments had faced larger cuts in order to be able secure the increase which will mean that funding per pupil does not need to fall as the school age population rises.

The pupil premium, an election commitment of both coalition parties, will mean schools receive additional funding for poorer pupils. Mr Osborne said it provided a “real incentive” for good schools to recruit children from deprived backgrounds.

It was announced last week by Deputy Prime Minister Nick Clegg as part of a “7bn Fairness Premium” which also includes free nursery places for disadvantaged two-year-olds and a university fund for poor teenagers.

A Department for Education spokesman said: “Schools budgets have not been cut to pay for the premium.

“The spending review grows the school budget at 0.1 per cent in real terms in each year of the spending review. Underlying per pupil funding will be maintained in cash terms.

“Tough decisions have been taken within the spending review to support a 7.2 billion fairness premium over the period, including the pupil premium.”

However, the Department for Education is being forced to make cuts in other areas.

Capital spending on schools is to be slashed by 60 per cent following Education Secretary Michael Gove’s decision to axe the Building Schools for the Future programme. The department must also make a three per cent reduction in its “resource spending” by 2014/15.

The Government has also announced that it has abolished the specialist school grant with the money instead going into the mainstream grant funding all schools receive.