Inflation has “eaten away” at some of the funding increases for schools that the Department for Education had hoped to deliver, Baroness Barran has said.

Speaking at the Institute for School Business Leadership Conference 2023, the DfE minister said: “We have put a lot more money into schools, but obviously inflation has eaten away at some of the real increase in funding that as a government we hoped to deliver.”

Chief executive of the ESFA David Withey told the same event that when looking at the financial health of schools, there was more of a negative picture for some maintained schools.

Schools received £2.4 billion in additional funding for 2023-24, and will get more than £2.8 billion in additional funding for 2024-25, the government has said.

Despite this, analysis by the Institute for Fiscal Studies has found that budgets are stagnating, with school costs growing at a similar rate as funding, and many academy trusts worried about their finances.

Asked how schools are meant to deliver outstanding education in challenging financial circumstances, Lady Barran added that the DfE has calculated that the average school will still be able to deliver within its budget.

She added: “Of course, there are schools that maybe can’t deliver within that but it is clear that over the last couple of years, actually, schools have seen a slight increase in their reserves.

“There are some small number of schools that are in financial difficulty, but also the vast majority have seen their reserves increase.”

Lady Barran said things are more difficult in special schools with the strain on the special educational needs and disabilities (SEND) system. She said: “Many of them are much smaller. Therefore, financially, it’s a tougher kind of task.”

She added that the situation had “got worse” since the 2014 SEND reforms, despite funding injections, and said that, in the SEND system, “there are things broken beyond the money”.

In his speech, Mr Withey acknowledged that there were “really significant challenges in the sector at the moment”, but said that the ESFA is actually seeing a more positive picture emerging.

However, he added: “When we look across the financial health of the system, actually, it’s probably a bit more of a negative picture in the maintained [schools] space.

“We do a lot of work. I have a team dedicated to engaging with local authorities on school resource management. I think it’s probably not a great surprise when I say that the level of engagement differs a little bit across different local authorities.”

School leaders were left disappointed on Wednesday when the 2023 Autumn Statement contained little for schools – despite unions asking for a £1.7 billion uplift in funding a year to stop schools having to make cuts.