SPENDING reforms, due to to take effect in April, will see further education schools £1.7million worse off, Lancashire education cabinet member Alan Whittaker predicts.
He has written to Education Secretary Estelle Morris voicing his concerns.
The shake-up involves the Learning and Skills Council taking over responsibility for sixth-form students studying at schools.
The Government has set up a funding formula which Coun Whittaker claims is weighted in the favour of schools with sixth forms.
He said: "If it was just a case of the Learning and Skills Council taking the money from our budget which we would have spent anyway, there wouldn't be a problem.
"But the funding formulae given to them by the Government means they are taking an extra £1.7million for schools with sixth forms.
"That effectively means all the other schools in Lancashire, primary and secondary, will have to do with £1.7million less."
Coun Whittaker told Mrs Morris: "I am most concerned that the provisional allocations from the local Learning Skills Council represent an increase of £1.7million on budget allocations under our current system.
"This is surprising given that the DfES has in the past suggested most local education authorities have in the past funded sixth form students at a higher level than those in further education colleges.
"In normal circumstances, such an increase would be welcome. However, this increase is not being funded with money from the Government.
"Coupled with local increases in our standard spending assessment, which is some 18 per cent below the average increase for education authorities, it is very likely that school budgets in Lancashire will have to be reduced in real terms."
A spokesman for the regions department, responsible for setting the amount of money the county receives, said: "Transfer of sixth form funding to the Learning and Skills Council will be cost-neutral at local authority level."
Coun Whittaker responded: "It is not cost-neutral for schools. We will have to explain to them why they will have less to spend."
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