A new report issued by the National Audit Office, warns that school budgets could be facing real-terms cuts of £3bn in the next five years, The Independent reports.

The report, looking at the financial sustainability of schools, says that realistic budget cuts of 8 percent per pupil by the year 2020 look increasingly likely, if schools are to remain adequately funded.

School leaders are calling the figures the biggest real-terms reduction in budgets in a generation.

The report was commissioned by the independent audit group, and identified numerous cost categories that posed the biggest liabilities to school funding. These included staff pay rises, higher employer contributions to national insurance and the teachers’ pension scheme as examples of rising industry costs that are unsustainable.

The group also warned that the government’s promise to ring fence the education budget did not include ensuring funding would meet costs per pupil rising in line with inflation.

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

Commenting on the government’s suggestion that teachers could work ‘more efficiently’ to save money, 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.”

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