The Department for Education “still does not understand” the impact of funding pressures on schools, an influential committee of MPs has warned.

The Commons Public Accounts Committee (PAC) today called for Ofsted inspectors to examine whether the need to make savings is damaging education in schools.

The recommendation is backed by heads’ and teachers’ leaders, who warn that funding is the biggest problem facing schools.

Today’s report raises concerns that neither Ofsted nor the Education and Skills Funding Agency [ESFA] assess the impact of the financial squeeze on education or outcomes in schools.

In early 2017, the DfE told the committee that Ofsted inspections would help to give it assurance that education outcomes were “not being adversely affected by the need to make savings”.

However, chief inspector Amanda Spielman last year told the PAC that responsibility for school funding sat elsewhere in government, and the inspectorate’s brief did not include matching spending and outcomes for every school.

In a later letter, she acknowledged that school leaders had had to make difficult choices to balance their budgets, but Ofsted inspectors had not seen an impact on education standards.

The report says that Ofsted and the ESFA “have started to seek to join up their work, but the department still does not understand the impact of funding pressures”.

Cash-strapped schools ‘forced to cut teachers’

The PAC recommends that “as part of its school inspections, Ofsted should examine and report on whether the quality of education and the outcomes schools achieve are being adversely affected by the need to make savings”.

The call was endorsed by Geoff Barton, the general secretary of the Association of School and College Leaders, who said the biggest problem facing schools is “the fact that the level of government funding to schools is completely inadequate”.

He added: “We support the recommendation of the Public Accounts Committee that Ofsted should examine and report on whether the quality of education is being affected by the need to make savings.”

Kevin Courtney, joint general secretary of the NEU teaching union, also backed the MPs’ recommendation.

He added: “It beggars belief that the HMCI told the PAC that Ofsted inspectors were not seeing an impact of funding cuts on educational standards. They cannot possibly have been asking the right questions.”

Mr Courtney said NEU members had reported that: teachers and support staff were being cut, the curriculum was being narrowed, there was a lack of resources, and pupils with SEND were being “disproportionately impacted by funding shortfalls”.

The DfE and Ofsted have been approached for comment.