Schools are in the grip of a funding crisis that the government is failing to acknowledge, former Labour education secretary Estelle Morris has warned.

Baroness Morris said it was never the right choice “not to invest in the future” and argued that it was unfair to the pupils being taught at a time of falling budgets.

Her hard-hitting criticism came during a debate on school funding in the House of Lords, and followed a survey which showed that most MPs believe the situation is a crisis.

Lady Morris said: “There’s a crisis out there and teachers are saying that it is the biggest problem that they are facing.

“And it does make a difference. It makes a difference to what we can teach children and how we can teach them.

“It makes a difference to the pressures that are on teachers in a very demanding job and it makes a difference in the end-run to the prosperity of our country and to the strength of our families and communities.

“What’s most worrying about this topic is that sense of crisis and that reality of what’s happening in the schools isn’t reflected in what we are hearing from government ministers.

Government ‘not acknowledging school funding problem’

“It seems to me that we have got a government at the moment which is not yet at the stage of acknowledging that a problem is there.”

Lady Morris added: “We have got to the stage where I now don’t trust the government on what they say about statistics around school funding.”

Under the Conservative government there had been a real-terms drop in funding per pupil of 8 per cent, she argued.

The Labour peer also said money had been “squandered” by putting cash into “pet projects” such as free schools, some of which had subsequently closed.

She said: “This is a crisis. This isn’t a blip. This isn’t a little problem that has got to be dealt with ... and there’s no hope on the horizon for things getting better.

“It draws the energy out of what is going on in our schools. It saps the enthusiasm of our school leaders and of our teachers.

“What saps the enthusiasm most is when the teachers hear the government tell them there is not a problem.

“All that does is create mistrust and resentment between politics and teaching and education.”

She added: “It is never the right choice not to invest in the future.”

Highlighting the impact on pupils, Lady Morris said: “It’s not fair, it’s not right, that they should have their years in schooling during a time of diminishing budgets.

“We need to know what the government is going to do about it.”

The Bishop of Worcester, the Rt Rev John Inge, said: “I fear she is right that there is a crisis in school funding.”

He told peers that headteachers in his own diocese had spoken of “the stress they are experiencing due to funding worries, of not sleeping due to such worries”.