SMALL rural schools in the Westcountry could finally get a fairer share of funding under plans unveiled by Schools Secretary Ed Balls.

After years of languishing at the bottom of league tables for the amount of money spent per pupil, the region is expected to benefit from a new formula which takes into account the higher costs of teaching in rural areas.

But there will be no concrete detail of what Labour plans to do until after the General Election, with headteachers told the dire state of the public finances meant "tough choices" had to be made.

Mr Balls made clear in an interview with the Western Morning News late last year that he wanted the new system to tackle "anomalies" which meant Westcountry pupils were short-changed by hundreds of pounds each.

Pupils at average-sized rural schools receive about 10 per cent less cash than their urban counterparts.

A consultation launched yesterday is seeking views on how to calculate the amount schools receive through the Dedicated Schools Grant.

It includes the basic per pupil funding for each school, extra money for children with learning difficulties and would take into account the "additional costs of providing schools in rural areas".

The "rural" criteria, which would only apply to primary schools, would be based on the number or "sparsity" of pupils in the local area, rather than linked directly to small schools which the Department for Children, Schools and Families (DCSF) believes could inadvertently lead to propping up inefficient organisations.

The consultation will run until June 7, a month after the expected General Election on May 6.

Mr Balls said yesterday: "The current funding system has given schools stability, but it is right to ensure that it properly takes into account the different needs of schools across the country.

"That is why we are consulting on how to make the system even better in the future, to ensure that money is distributed more fairly, and that every pound spent goes on giving every child a chance to succeed."

The minister also confirmed funding rises for schools over the period 2011-13, which would mean an annual increase of 2.1 per cent in cash terms per pupil.

Yeovil MP David Laws, the Liberal Democrat schools spokesman, accused Mr Balls of a "pretty desperate attempt… to repackage existing deprivation funding for schools".

He added: "What is missing is any suggestion of additional money. Since it would be politically impossible to cut the budgets of some schools to shift money to others, what Ed Balls is talking about is political posturing, not serious policy."

Westcountry local education authorities are significantly worse off every year, compared to other parts of the country.

Devon is the fourth worst funded area in 2009-10, granted just £3,842 per pupil, 9 per cent less than the English average of £4,217. By contrast, the 10 best-funded areas receive an average of £6,252.

Of the 151 local education authorities, Cornwall is the 11th worst funded, Somerset 14th, Dorset 23rd, Plymouth 44th and Torbay 53rd.

Each receives hundreds of pounds less than the national average, which can mean a shortfall of up to £150,000 in a school with 400 pupils.

David Hutchings, a spokesman for Devon County Council, welcomed the consultation which had been expected several weeks ago.

He said: "We are pleased that it has finally been announced and will be giving evidence to it and urging schools to do so. There is no doubt that schools are suffering because of the postcode lottery of education funding at the moment."

All councils and headteachers have been told to find savings.

A study by the DCSF last year, in part based on work in Cornwall, suggested a "federation" of two small rural primary schools, where a headteacher and governing staff were shared, could save a net £15,000 on leadership costs. A federation between three schools could save about £50,000.

Devon council expects one in 10 of its primary schools to federate within a year, and also points to other money-saving initiatives, including one school buying goods and services on behalf of several or a group of schools setting up a single school company.

Mr Balls said: "There is no doubt that this is a tougher settlement than in the past and tough choices have to be made by schools, by local authorities and by the Government.

"Schools want stability in their funding, they want to plan their budgets for the next three years, and now they can, knowing that overall funding will continue to rise in real terms and that minimum guarantees will continue to operate."