“This report is a timely warning about the very serious implications of falling pupil numbers on school budgets which are already stretched beyond a point that is sustainable.

“As the EPI report points out, schools cannot simply reduce costs in proportion to falling numbers because many costs are fixed. This will mean further cuts to provision, resources, and activities and in some smaller schools the only option will be mergers or closures. Schools must not be left to manage the huge financial risk that this change in the national picture presents.

“The next government must address this grave situation by using the reduction in pupil numbers as an opportunity to improve per-pupil funding – particularly for disadvantaged pupils – rather than as a saving for the Treasury.

“This would help to address the financial pressures caused by the past 14 years of underfunding and put education on a more sustainable footing without costing any additional money.”