The biggest school funding shortfall in England since the 1990s threatens to damage education standards, MPs have warned.
The parliamentary Public Accounts Committee (PAC) says schools will have to cut spending by £3bn by 2019-20 because of real-terms reductions in funding per pupil.
The Government insists that funding is at record levels, but the cross-party committee accused it of having a 'collective delusion' that spending cuts could be achieved through efficiency savings.
The committee's chair, Meg Hillier MP, said: 'Pupils' futures are at risk if the Department for Education fails to act on the warnings in our report.
'It sets out more evidence of what increasingly appears to be a collective delusion in government about the scope for further efficiency savings in public services.'
Head teachers said the Department for Education did not seem to understand the pressures that schools were already under.
Malcolm Trobe, leader of the Association of School and College Leaders, said: 'The fact is that reduced budgets mean fewer staff and this in turn means larger class sizes, reduced GCSE options, and cutbacks in support services and enrichment activities.'
