Some schools could face extra budget cuts of up to 2 per cent a year under government plans to introduce a national “fair funding formula”, TES has learned.

Officials at the Department for Education are understood to be considering finding extra cash for low-funded schools by imposing annual 2 per cent cuts on schools in the areas that currently receive the most money.

Chancellor George Osborne confirmed this week that a new formula would be introduced in 2017-18, but did not reveal details of its implementation. If approved, the DfE measure is expected to lead to annual cuts for five years. The move is designed to close gaps between schools’ budgets described by Mr Osborne as “arbitrary and unfair”.

At present, schools in the best-funded areas – many in inner London – receive over £3,000 per pupil more than those in the worst-funded areas.

A DfE spokesperson said: “This government is taking the difficult decisions necessary to ensure that the schools budget is protected and will continue to rise as pupil numbers increase.

“We have made significant progress towards fairer funding for schools, through an additional £390 million allocated in 2015-16 to 69 of the least fairly funded areas – the biggest step towards fairer schools funding in 10 years.”

This is an edited version of a story in the 27 November edition of TES. Subscribers can read the full version here. Alternatively, read the digital edition of TES on your tablet or phone or by downloading the TES Reader app for Android or iOS. Or pick it up at all good newsagents