Schools receiving money from the Government's £1.25 billion flagship "pupil premium" policy have been warned by the education watchdog that they must be able to demonstrate how the funds are making a difference to the achievement of children from poor backgrounds.
Sir Michael Wilshaw, Ofsted chief inspector, said finding ways of spending the premium to help the most disadvantaged pupils was not "rocket science" - and Ofsted had been surprised to find that half of schools in a survey had said it was making little or no difference to the way they were being managed and operated. Only 10% said it was having a "significant" effect, all of which were in the most deprived areas.
"The big issue is that this money is for our poorest children to ensure that they achieve as well as others who come from more privileged backgrounds, it is simply not good enough for heads of schools to say that it is not changing policy," he said.
"If this money is going to the main school budget and children from poor backgrounds are doing well, we do not have an issue with that and I'm sure that Government won't, that is not a problem as long as they can demonstrate that is happening.
"It will be an issue if it just falls into the main school budget and a school can't show that it is improving the outcomes for poor children. We will be very critical of those schools that are not thinking long and hard about the use of the pupil premium."
He added: "Most schools are subsuming it within their main budget, they are actually not ring fencing it (the premium). That is fine, as long as the school can demonstrate that they are using that money and any other money they identify to support children, poor children, to achieve outcomes that will close the gap.
"If they are not doing that, then we will be critical of it. This is not rocket science stuff. There is a wealth of good practice out there in terms of how you raise achievement and how you raise achievement particularly of youngsters from poor backgrounds."
A Department for Education spokesman said: "It's unacceptable that children from disadvantaged backgrounds are less likely to do well in school than their peers. The coalition Government has introduced the pupil premium to tackle this problem.
"We have given schools the freedom to use the additional funding in innovative ways. However, it is vital they use it to boost results for the most disadvantaged pupils, drawing on the large amount of evidence on how to make the biggest difference.
"The pupil premium has only been in place for one year, but we welcome this early report by Ofsted and their recommendation that schools need to use the premium properly. We believe that Ofsted's focus on the pupil premium will cause schools to dramatically improve the ways they use this very large amount of money. By protecting schools' budgets we have made sure that the pupil premium - which will be worth £2.5 billion by 2014-15 - is additional money for schools."