Teachers are doing an even greater job of engaging disadvantaged pupils and raising their attainment levels, according to a new report.

Ofsted's Pupil Premium update revealed that state schools are benefitting from additional funding, which is specifically geared towards closing the gap between disadvantaged youngsters and their peers.

The survey, the third of its kind, showed school leaders are making good use of the supplementary financial support from the government and tracking progress in pupils with even greater clarity.

School minister David Laws said that the pupil premium is having a transformative impact on the lives of young people across the country and, in turn, creating a fairer society and a stronger economy.

"This report shows that our reforms to make schools more accountable for how they spend the funding is revolutionising the way such pupils are given the best possible start to life," he added.

"It shows headteachers, teachers and governors are rallying behind the policy to close the achievement gap between disadvantaged pupils and their peers. And where performance is an issue we are taking swift action to ensure all pupils are given the education they deserve."

This year has seen the pupil premium budget rise to £2.5 billion and its reach has been extended to three and four-year-olds, which, along with free school meals, has boosted the education system.

Ministers have lauded teachers and school leaders for their efforts in helping make the pupil premium a success. They have also credited policy changes from central government for making schools more accountable.

"School leaders, teachers and governors accept the challenge of raising of the attainment of children from disadvantaged backgrounds," said Sir John Dunford, pupil premium champion (an independent role that sees him report back to the Department of Education).  

"This is what motivated many of them to come into teaching and they regard the pupil premium and the evidence available on what works as giving them the tools to narrow the gap between the achievement of disadvantaged children and their more fortunate peers."