School budgets are facing a real-terms cut of £3bn over the next four years, a report has warned.

A National Audit Office report into the financial sustainability of schools has warned that mainstream schools will need to reduce spending by an average of 8 per cent per pupil by 2019-2020 - a difference education leaders say is the biggest real terms cut in a generation.

The independent parliamentary audit group named staff pay rises, higher employer contributions to national insurance and the teachers’ pension scheme as examples of rising industry costs that are unsustainable.

It also warned that while the Department for Education’s overall budget is protected in real terms, it does not provide for funding per pupil to increase in line with inflation.

Shadow Education Secretary, Angela Rayner called the projections “an appalling indictment of Tory policies” that would surely lead to redundancies.

Teaching groups and education leaders have also condemned the government for not offering a clear plan as to how schools might meet cost-saving targets.

Responding to the budget forecasts, the DfE said schools would have more funding than ever for the current 2016-17 academic year.

But the department also forecasts the number of school-age pupils to rise by 7.7 million before January 2020, meaning funding per pupil will, on average, rise only by 1.3 per cent from £5,447 in 2015-16 to £5,519 in 2019-20.

The DfE provides separate funding for pupils aged 16-19, which fell by 14 per cent in real terms between 2010–11 and 2014–15.

Publishing the NAO report, the Committee of Public Accounts said schools are left uncertain about how much funding they will receive each year, with “growing financial pressure”, making it difficult for bodies to plan and budget effectively.

According to the NAO, it is expected that schools will make “efficiency savings through better procurement (estimated savings of £1.3bn)” and by “using their staff more efficiently (the balance of £1.7bn)”, prompting fears that recruitment cuts and job losses may be on the cards.

When questioned on this, a DfE spokesperson said the changes were not indicative of redundancies or job cuts.

Ms Rayner said: “I am not sure how teachers can be expected to work more efficiently - the government have got a bloomin' cheek suggesting that.

”The only conclusion I can come to is that these cuts will mean teachers are going to be made redundant, or that there is going to be a recruitment freeze, at a time when teachers are already leaving the profession in droves and we have a crisis in teacher recruitment and retention.

“This is really an appalling indictment of Tory policies.”

Adrian Prandle, Director of Economic Strategy and Negotiations at the Association of Teachers and Lecturers (ATL), said: “School staff will be worried that the NAO is talking about ‘using staff more efficiently’ and ‘workforce savings’, and the Department for Education, which refuses to admit there is already a crisis in teacher recruitment and retention, should also be deeply concerned.

The NAO’s analysis indicates that while the financial position of primary schools has been relatively stable, there are signs of “financial challenges” in secondary schools.

The proportion of maintained secondary schools spending more than their income increased from 34 per cent in 2010-11 to 59 per cent in 2014-15, with more than 60 per cent of secondary academies spending more than their income in that time.

“The Department does not know with certainty why schools are overspending, or underspending to build up reserves, or for how long these patterns are sustainable,” the report said.

In a joint statement, ASCL, ATL, NAHT, NUT and Voice union leaders said: “The Government’s long-awaited and much-delayed plans for reform of school funding will not solve the funding crisis facing schools and colleges.”

The Government says it is protecting the education budget. School funding is in fact frozen, but inflationary factors mean that schools face the biggest real terms cuts in a generation.

They added: “We are already seeing job losses, increased class sizes and cuts to courses in our schools and colleges.”

The budget projections come just three weeks after the Chancellor announced a £240m spend on expanding grammar schools across England.

Liberal Democrat Shadow Education Secretary John Pugh said:

“It is a disgrace that while schools face a severe funding crisis, £240 million is being spent on expanding grammars.

“This Conservative Government has completely the wrong priorities.

“Instead of protecting funding per pupil to give every child a chance in life, it is pushing through plans that will stretch our schools and teachers to breaking point.”

More than 60 per cent of secondary academics spent more than their income in the 2014-15 academic year.

Meg Hillier MP, Chair of the Committee of Public Accounts, said: “I hope the Department for Education get their act together to understand and address a sector facing increasing financial challenges faster than the Department of Health have.

A DfE spokesperson said: “We want schools to have the resources they need, and through our careful management of the economy we have been able to protect the core schools budget in real terms. That means that in 2016-17 schools will have more funding than ever before for children’s education, totalling over £40 billion.

Pisa rankings 2015: The best countries in the world for education Show all 20 1 /20 Pisa rankings 2015: The best countries in the world for education Pisa rankings 2015: The best countries in the world for education Singapore Singapore was the top performing country across all three subjects (maths, science and reading) in the 2015 PISA tables. The small Asian country is renowned for its high academic standards and produces excellent results, particularly in mathematics. Pupils here learn maths by what is known as the “mastery method,” which teaches children how to solve problems as a class and errs away from more traditional recitations of formulae. Singapore selects its teachers from the top 5 per cent of graduates, and teachers are very highly regarded as societal influencers. Getty Pisa rankings 2015: The best countries in the world for education Japan Japanese schools came in 2nd for Science, 5th in the world for maths and 8th for reading skills. Japan has one of the best-education populations, with zero illiteracy recorded and strong emphasis on arithmetic and geography. While children around the world typically learn between 26 and 33 letters of the alphabet, Japanese pupils will know 1,006 kanji characters by the time they leave primary school. Getty Pisa rankings 2015: The best countries in the world for education Estonia Dubbed the “new Finland” by some, Estonia has risen rapidly towards the top of the Pisa rankings despite being one of the world’s youngest countries. Estonia spends around 4 per cent of GDP on education. Getty Pisa rankings 2015: The best countries in the world for education Taipei Taiwan has been known as a centre for technical excellence for decades and its students perform consistently well in technology, maths and sciences. Education is compulsory from age six, and some 95 per cent of all students continue their education after age 15. Getty Pisa rankings 2015: The best countries in the world for education Finland Children in Finland don’t start school under age seven, yet consistently produce some of the best results in the world. The country’s education system has a somewhat alternative approach to that of most OECD countries, placing emphasis on playtime and creative learning. Pupils don’t sit tests until they reach 16. Getty Pisa rankings 2015: The best countries in the world for education Macau Most schools in Macau are private or subsidized. There are only a handful of government or state schools, which tend to teach in Portuguese or have a strong emphasis on pupils learning the language. The majority of schools are also selective grammar schools which focus heavily on languages, mathematics and sciences over vocational subjects. Getty Pisa rankings 2015: The best countries in the world for education Hong Kong A former UK colony, Hong Kong education has been closely modelled on the British system in the past,. Education is free and compulsory in primary and junior secondary schools. Independent schools follow the International Baccalaureate, UK or US curricula. The territory participates separately from China (Shanghai, Beijing, Jiangsu, Guangdong) in the Pisa league tables. Rex Pisa rankings 2015: The best countries in the world for education South Korea South Korea has long been one of the world’s top academic achievers, but at the price of very long school days for students. Many start school by 8am, and carry on until late at night at private study clubs. Getty Pisa rankings 2015: The best countries in the world for education New Zealand While the New Zealand school curriculum is not dissimilar to the UK’s, children here are not required to start school until age six. The country also has eight state-funded universities offering degrees in a range of subjects. Getty Pisa rankings 2015: The best countries in the world for education China Getty Pisa rankings 2015: The best countries in the world for education Slovenia Slovenia scored highly in this year’s maths and science results. Basic education for children ages six to 15 is compulsory and free for children in Slovenia. International citizens are taught the Slovenian language at the beginning of school. Rex Pisa rankings 2015: The best countries in the world for education Australia Australian Pisa candidates came in 14th place for Science, 15th place for reading and 23rd place for Maths – slipping down in the ranks on previous years. Australia has the third highest number of international students in the world behind the UK and US, despite having a much lower population overall. The school system is split mainly into government state-funded schools, Catholic faith schools and independent fee-paying schools. Getty Pisa rankings 2015: The best countries in the world for education United Kingdom The UK jumped to 15th place for science in this year’s Pisa tables, up from 21st in 2012. According to the report, teachers in the UK are among the youngest across all developed countries. The total amount spent on British education exceeds that of most other participating countries – and critics argue the education system should provide better results because of this. Getty Pisa rankings 2015: The best countries in the world for education Germany Schooling in Germany is governed by individual states, which each have their own education departments and policies. Normally, children begin primary school at age six but secondary school options vary widely. Germany increased its expenditure on educational institutions from primary to post-secondary non-tertiary levels, despite declining enrolments, and teachers have competitive salaries compared to others as a result. Getty Pisa rankings 2015: The best countries in the world for education Netherlands Dutch children were found to be the happiest in the world in a 2013 Unicef study. Schools typically don't give much homework until secondary level and students report little pressure and stress. Rex Pisa rankings 2015: The best countries in the world for education Switzerland Just five per cent of children attend private schools in Switzerland. Lessons are taught in different languages depending on the region of Switzerland, with German, French or Italian the most common languages of instruction. From secondary onwards students are separated by ability. Rex Pisa rankings 2015: The best countries in the world for education Ireland The majority of secondary schools in Ireland are privately owned and managed but state-funded, but there are also state comprehensives and vocational schools. The country performed especially well in Pisa reading tests - coming in fifth place globally. Rex Pisa rankings 2015: The best countries in the world for education Belgium Belgian schools came in 15th place for science in this year’s Pisa table. Schools here are free, and regulated and financed by three separate communities – Flemish, French and German-speaking. Boys in Belgium perform significantly better than girls in school according the latest OECD reports. Rex Pisa rankings 2015: The best countries in the world for education Vietnam Education in Vietnam is state run system of public and private schools. The country took part in the Pisa tests for the first time in 2012 and scored higher in reading, maths and science than the UK and US. This is believed to be partly a result of high spending levels on education and hardworking culture instilled in children from a young age. Getty Pisa rankings 2015: The best countries in the world for education Canada Education is compulsory up the age of 16 in most Canadian provinces, apart from Manitoba, Ontario and New Brunswick where pupils must stay on until 18 or when high school diploma is achieved. The education system varies between French and English-speaking provinces. Rex

“We are introducing a national fair funding formula so schools are funded according to their pupils’ needs, rather than by their postcode. This will give headteachers certainty over their future budgets, helping them make long term plans and secure further efficiencies.