Schools around England to get national funding formula closing 'unfair gaps'
A national funding formula for schools will be introduced in England from 2017/18 to close "arbitrary and unfair" gaps between areas, George Osborne is to announce.
Local authorities, teaching unions, MPs and spending watchdogs have been campaigning for the change - promised by the Department of Education in 2012 - to prevent disadvantaged pupils losing out.
The Chancellor will use Wednesday's Spending Review to set out plans to end the present system, which is based on 10-year-old data and means the 10 best-funded areas get £2,000-plus more per pupil than the 10 worst.
A National Audit office investigation found schools in some of the poorest areas saw funding fall by more than 5% between 2010-11 and 2014-15 despite the pupil premium top-up for disadvantaged youngsters.
Knowsley in Merseyside receives nearly £750 per pupil less than Wandsworth, in south London, even though more of its pupils are on free school meals.
Under the proposals - to be published for consultation next year by Education Secretary Nicky Morgan - a national per-pupil rate will be topped up according to numbers of disadvantaged and poorly-performing students.
Prior to their introduction, the existing system will be made "more consistent and better focused", a Government source said.
Mr Osborne is expected to say that funding for the pupil premium will be held at its current rate of £2.5 billion a year.
A Government source said: "This is a key part of our goal of extending opportunity and providing educational excellence, everywhere. It means bringing an end to a system that has become arbitrary and unfair.
"We'll ensure that there is a smooth transition, with a pace of change that is manageable for schools and local authorities.
"We are ensuring schools across England are funded fairly so that parents know all pupils, whatever their background and wherever they live in the country, have access to a good education."
Reforms are also expected to be applied to funding for high needs and early years.
Schools funding is one of the areas of spending protected from the latest round of cuts to be set out by Mr Osborne on Wednesday, alongside his Autumn Statement.
But the Department for Education is one of a number of major Whitehall departments with which the Chancellor is still to confirm he has done a deal as last-ditch negotiations continue.
So far 11 agreements have been announced, amounting to an average 24% drop in funding between now and 2020 - meaning £4 billion of savings.
The Home Office is among those still to be finalised, with senior police officers issuing stark warnings of the consequences of further reductions to their funding on forces' ability to deal with a Paris-style terror attack.
Mr Osborne is due to be grilled about the round of cuts - and what action he is planning to mitigate the effect of tax credit cuts - when he appears on BBC1's Andrew Marr Show.
He has promised to set out ways to protect millions of working families from the highly-controversial £4.3 billion welfare squeeze - which was rejected by the House of Lords in a damaging defeat for the Government.
The Chancellor will use the Autumn Statement to confirm that the basic state pension will rise to £119.30 a week from April 2016, despite criticisms of protections being afforded OAPs at a time of deep cuts elsewhere.
The 2.9% rise matches the rise in average earnings - one of the three "triple lock" safeguards in place to ensure pensioners receive a minimum of 2.5% extra each year, regardless of low inflation.