A Government committee led by Harlow MP Robert Halfon says urgent action must be taken to "fix the broken education funding system".
A report by the Education Select Committee says funding has not kept pace with the rising demands placed on schools and colleges.
The committee’s inquiry found that, as well as coping with growing pupil numbers and rising costs, schools were increasingly being asked to cover additional services without adequate resources.
They included mental health, social issues and more complex special educational needs and disabilities provision.
- Click below to watch Hannah Pettifer's full report.
- Click below to watch a full interview with Robert Halfon MP.
The Department for Education said school funding was at its highest level but that it "recognised that there are budgeting challenges".
A spokesman said: "We are glad to see that school funding is being highlighted as an important issue ahead of the next Spending Review."
The report shows that further education has been hardest hit, with post-16 funding per student falling by 16% in real terms over the past decade. MPs urge a £1 billion boost.
MPs have called on the Government to commit to a multi-billion cash injection for schools and colleges and bring forward a strategic ten-year education funding plan.