Schools minister David Laws has announced that an extra £350m will be given to schools in 2015/16 to address the unequal distribution funding between local authorities in England.
Mr Laws made the announcement ahead of this week’s Budget.
Money will be used from the Department for Education’s existing protected budget, and additional new money from the Treasury.
Mr Laws said the Treasury allocation would be confirmed by the chancellor George Osborne in his Budget.
Under the proposals, every local authority would attract a minimum funding level for each pupil at every school and, where current funding arrangements do not meet the minimum level, it would be topped up by the DfE.
A DfE spokesman confirmed that once the money is allocated, schools have the freedom to spend it as they wish, including on building and maintenance work.
The extra money will be allocated in April 2015, for the 2015 to 2016 financial year.
Wates Construction managing director for education and investments Stephen Beechey said: “In essence the DfE’s proposals recognise the need to reform how funding is apportioned on a fairer footing for Britain’s most deprived local authorities.
“If approved, these proposals will potentially retain the Minimum Funding Guarantee, and this is a positive step towards re-affirming the thrust of previous welcome announcements, such as the Pupil Premium.
“Granted we are still in the consultation phase, but details on where £350m will come from – either through the DfE’s budget for 2015/16 or through the Treasury – were lacking.”
In his statement to parliament, Mr Laws said that the school funding system had been based on historical data that was “out of date and no longer reflected pupils’ needs” for too long.
He said “This has resulted in a system that is opaque, overly complex, and is frankly unfair to pupils, parents and teachers. Sometimes similar schools just miles apart can be funded at very different levels, just because they happen to be in different local authority areas.”
The allocation of per-pupil funding for 2015/16 will be based on the October 2014 school census.
But Mr Beechey warned funding would only be fair if pupil numbers do not drastically change.
“For the education sector to act as the judge for whether these proposals represent a fairer deal for Britain’s most deprived schools, a lot will hinge on whether pupil numbers will remain at 2014-15 levels during the 2015-16 financial year.”