Schools in some of Scotland’s most deprived areas face severe funding cuts that will impair their ability to tackle the poverty-related attainment gap and effectively mean they are paying for new services elsewhere, ministers have been warned.

It comes amid a shift in arrangements for targeting pupil support cash under the Scottish Attainment Challenge.

Instead of a limited number of “challenge authorities” being prioritised according to Scottish Index of Multiple Deprivation data, money will be distributed across all councils using Children In Low Income Families statistics from the Department for Work and Pensions.

The revised approach, which is called the Strategic Equity Fund (SEF), aims to develop a fairer system and encourage longer-term planning. Allocations of SEF and Pupil Equity Fund (PEF) money have already been set out for the 2022/23 to 2025/26 financial years.

However, the change has sparked considerable fears over the impact on schools in the nine challenge authorities.

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Inverclyde, for example, is due to receive around £3.2 million in PEF and SEF cash in 2025/26. This is down approximately 47% compared with nearly £6m provided in 2021/22 through PEF and the Challenge Funds. Using the same calculation, Dundee can expect to see its allocation fall from a little over £11.5m to around £6.4m.

The other challenge authorities are Glasgow, Clackmannanshire, East Ayrshire, North Ayrshire, North Lanarkshire, Renfrewshire and West Dunbartonshire.

Michael Marra, Scottish Labour MSP for North East Scotland, stressed that cuts by the end of 2025/26 would be even more swingeing based on the difference between Challenge Fund and SEF allocations.

“The nine existing challenge authorities will lose 60% of their attainment challenge funding,” he said. “Dundee is hit worst of all with a loss of 79% of this funding. The Scottish Government has been explicit that PEF money cannot be used to backfill cuts. PEF monies are already allocated to schools with programmes in place and staff employed.

“The impact in Dundee will be the loss of over 100 staff posts as a result of Scottish Attainment Challenge (SAC) funding reductions.

“There are also acute concerns that funding leveraged from third sector partners through SAC projects will also be lost in these communities. The real impact on children could be much greater than these initial financial allocations indicate. These are speech therapists, family support workers and much more. These are all services currently provided to the most vulnerable.

"The EIS have said they are ‘appalled’. The NASUWT have said ‘it’s clearly not right to be making these swinging cuts’. School Leaders Scotland have called the policy shift ‘immoral’. I am genuinely astonished that the SNP government is digging in and refusing to admit they have got this so badly wrong.

“There has been a long established consensus in Scotland that children living in areas of multiple deprivation with the deepest poverty face particular barriers to success in life. The retreat from this analysis by the SNP government is deeply worrying.”

HeraldScotland: Michael Marra, of Scottish Labour, is concerned about the new funding model.Michael Marra, of Scottish Labour, is concerned about the new funding model.

However, Ruth Binks, Director of Education, Communities and Organisational Development at Inverclyde Council, told MSPs there was a need to be “pragmatic”.

“If you’re asking me if I would like to keep the £2.8m that we will lose, the answer is, yes, I would like to,” she said.

“However, I think we... also have to look at different funding models. There is poverty throughout all of Scotland and in every education authority. I think the original funding model did merit revision.”

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She added: “I do think [the refresh] was a fair thing to do. I think we did need to look altruistically across the whole of Scotland... I think I started by saying that if I could keep the £2.8m, I would absolutely welcome that. It is a big cut for Inverclyde – but I think it’s one that we always knew could and would happen.”

A Scottish Government spokesman said: “Investment to tackle the povertyrelated attainment gap is increasing and our record funding of £1 billion over this parliament is empowering schools and councils to drive education recovery and accelerate progress.

“All school pupils experiencing poverty will benefit from targeted funding in 2022-23.

"The funding model, which sees all local authorities receive Strategic Equity Funding for the first time, was agreed with Cosla and provides a fairer reflection of the numbers of children impacted by poverty.

"The redistribution of Attainment Challenge funding is taking place over four years, supporting challenge authorities to transition to their equitable share over time.”