Government efforts to “level up” funding for education have resulted in cuts to the money going to the most deprived schools, the Whitehall spending watchdog has found.

The National Audit Office (NAO) said that since the introduction of a national funding formula for England there has been a “relative redistribution” of resources to schools in better-off areas.

In contrast, it said, almost 60% of the most deprived fifth of schools have seen a real-terms reduction in Government funding since 2017-18.

While schools in poorer areas continue to receive more support than those in better-off parts of the country, the NAO said the gap is narrowing and questioned whether the formula is leading to a fair allocation of resources.

The department must evaluate whether this funding model is matching resources to need

The findings are potentially embarrassing for Boris Johnson who, shortly after entering Downing Street in July 2019, announced an increase in funding under the formula with the aim of “levelling up education funding and giving all young people the same opportunities to succeed”.

The formula, first introduced in 2018-19, brought in minimum per-pupil funding levels, but because most schools with high levels of deprivation were already receiving above the minimum threshold they did not see any increase.

However, under the formula, more than one in three of the least deprived fifth of schools (37.1%) did get a rise. In all, in 2020-21 an additional £266 million was allocated to 3,150 schools – none in the poorest fifth.

The NAO said that, since 2017-18, average per-pupil funding for the most deprived fifth of schools has fallen in real terms by 1.2% to £5,177, while for the least deprived fifth it has risen by 2.9% to £4,471.

Cities with high levels of deprivation, such as Nottingham and Birmingham, as well as most London boroughs, have seen cuts while local authorities with relatively low levels of deprivation in the South West, the East Midlands and the South East received increases of around 1%.

In all, 58.3% of the fifth most deprived schools suffered a real-terms per pupil funding cut, including 83.6% of those in inner London.

While overall funding from the Department for Education (DfE) to schools rose from £36.2 billion in 2014-15 to £43.4 billion 2020-21, an increase in pupil numbers meant it amounted to a real-terms per pupil increase of just 0.4%.

At the same time the DfE estimated that, between 2015-16 and 2019-20, cost pressures on schools outstripped funding increases by £2.2 billion, mainly because of rising staff costs.

The head of the NAO, Gareth Davies, said: “The Department for Education has met its objective of making the way it allocates school funding more transparent and consistent. However, it is less clear whether it has met its objective of allocating funding fairly.

“Although more deprived areas and schools continue to receive more per-pupil funding than those that are less deprived, the difference in funding has narrowed.

“The department must evaluate whether this funding model is matching resources to need.”

Directly contradicting the Government’s levelling-up agenda, under its new formula funding has decreased in real terms for many of the most deprived schools and increased for those already better off

Commons Public Accounts Committee chairwoman Dame Meg Hillier said schools have been left to plug a “staggering” gap in funding.

“Directly contradicting the Government’s levelling-up agenda, under its new formula funding has decreased in real terms for many of the most deprived schools and increased for those already better off,” she said.

“DfE must get a grip of school funding to understand the impact of the pandemic and ensure resources target those most in need.”

For Labour, shadow schools minister Peter Kyle said the report showed the Government is neglecting children.

“Even before the pandemic, the Conservatives were stripping away funding from the schools and children who need most support,” he said.

“With the gap in learning between kids on free school meals and their peers widening, it couldn’t be clearer the Government has got the wrong priorities for school funding.”

Labour-led Birmingham City Council said the report findings showed the Government was “leaving our country’s most-deprived communities behind”.

Councillor Jayne Francis, the council cabinet member for education, said: “The Government enjoys talking about levelling up, but the reality of life under a Tory Government is laid bare by this report from the National Audit Office.

“That the funding for our schools in Birmingham has gone down in real terms, whilst schools in the least deprived areas have received a funding boost is an outrage.

“Here in Birmingham, our teachers have gone above and beyond, especially over the past 16 months, to educate our children in the face of brutal cuts to their funding.

“Birmingham schools have been forced to shut their doors early in order to make ends meet, and the funding that the council receives from the Government to maintain our schools leaves us unable to plan vital repairs for our school buildings.”

The DfE however insisted that the formula is levelling up school funding and “delivering resources where they are needed most”.

A spokesman said: “It ensures that the areas with high proportions of students from disadvantaged backgrounds are receiving the highest levels of funding, providing £6.4 billion in funding for pupils with additional needs in 2021-22.”

The spokesman said the Government is providing the biggest uplift to school funding in a decade, with an additional £14 billion over the three years.