IT schools supplier RM has blamed the government's allocation of education funds for what it described as "subdued" market conditions.

The company issued an interim management statement this morning in which it said it expected to see a decline in UK Learning Technologies sales in the 12-month period to September 2011.

"Government announcements indicate that, whilst total revenue funding for schools will increase year-on-year, there will be winners and losers," said RM boss Terry Sweeney.

"The amount of capital funding devolved to individual schools has also decreased significantly. Against these short-term difficulties, we continue to win, renew and extend long-term contracts. We are also seeing encouraging levels of demand in our Education Resources business."

RM added that trading in the company's first quarter of the year had been flat, but said it was in line with the current market consensus range.

The company said it had reached financial close for the last five remaining Building Schools for the Future projects. Additionally it negoitated extensions for two other BSF contracts.

RM said in November last year that committed revenue was down – because of the coalition government's review of the school building programme. ®