CHANGES to how schools are funded have been criticised following the announcement of a major shake-up of education in County Durham.

Durham County Council is carrying out a review of its schools in light of mounting budget deficits and increasing financial pressures.

The authority says schools are facing financial challenges caused by a combination of flat cash grants, changes to the National Funding Formula (NFF), and in some areas, reduced pupil numbers.

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The council has written to the Government to express concerns that the NFF could result in “significant rationalisation” of small schools, resulting in “devastating impacts” on local communities.

Councillor Alan Napier said: “It’s important we plan to ensure our children can access top quality schools and teachers but we are living in the world of austerity.

“The national funding formula takes away any discretion to manage local circumstances so we have to act now to make sure we have a sustainable future.

“The Government has repeated that they have put in more money. It simply isn’t true in the light of extra costs. We have to remember in the future that funding will be more weighted towards pupil numbers which will affect rural schools and schools facing a short-term reduction in numbers.

“Local authorities and local schools are being left to pick up the pieces. We have been given a ‘hospital pass’ by the Government.”

Around three quarters of maintained primary schools, and around half of maintained secondary schools, in the county are classed as “small” by the council.

Since 2012 there have been 12 school amalgamations, involving 25 schools, and three closures, aimed at reducing the number of small schools.

Six schools have had to set budget deficits for this year, with Wellfield School in Wingate and Wolsingham School in Weardale facing the most significant financial challenges - with a combined deficit of £4.3m.

Cllr Olwyn Gunn said: The reason for this is to ensure the local authority fulfils its duty to provide every child with a good education which can only be done when we are confident our schools are well led, well resourced and sufficient to meet demand as pupil levels rise and fall.

“Changes to national funding make this a priority but the important focus is on improving educational standards.”

The review, which will start in the Wingate, Weardale and Horden areas, will look at a range of options, including closures, amalgamations, academy conversions, sharing headteachers and the creation of federations.

The Government says the new formula is part of a plan to increase school funding by £1.3bn and will end a "postcode lottery" by removing discrepancies.