By Richard Johnstone | 11 May 2012
Plans to monitor the spending of public money in academy schools are weak and might not be able to ensure accountability, the Public Accounts Committee has warned.
In a report examining how the Department for Education oversees education spending in England, the MPs said there was ‘insufficient emphasis’ on achieving value for money as more schools become independent of local authorities. Inspection and oversight of the growing number of academy schools needed to be better developed to monitor public funds, the PAC found.The department distributed £56.4bn in 2011/12 to schools, local authorities and other public bodies to pay for education and children’s services in England.
In the period examined by the report, responsibility for value for money was shared between the DfE and councils for local authority-maintained schools and between the department and the Young People’s Learning Agency for academy schools.
Last month, the Education Funding Agency replaced the YPLA. It now funds 1,807 academies, compared with just 203 when the coalition government came to power.
The PAC report identified ‘a weakness of the proposed arrangements’, with the roles of different regulators ‘blurred’ as more schools converted to academy status. This was despite the government having produced three drafts of the code, called the Accountability System Statement, which intended to set out responsibilities.
In the period of the report, the DfE principally relied on local authorities and the YPLA to exercise financial oversight of schools. Many authorities are now reducing the resources devoted to this, the PAC warned, and there are ‘concerns’ over whether the new agency will have the skills and capacity to oversee academies.
The MPs also highlighted specific concerns with academies, saying they were ‘alarmed by reports of worrying expenditure’ such as very high salaries being paid to senior staff.
This could be symptomatic of wider problems, and the department needed to improve its understanding of such indicative spending so it could determine if it should intervene.
Committee chair Margaret Hodge said that giving greater autonomy to individual schools made it ‘ever more important for the department to tell us exactly how accountability to Parliament is going to work’. However, specific responsibilities for achieving value for money remained unclear.
She added: ‘The department has described arrangements for providing assurance on regularity and propriety. But although this is the third draft of the accountability arrangements we have seen, we remain very concerned at the weakness of the proposed arrangements to ensure accountability for value for money.’
A DfE spokesman insisted that publishing more data on how schools spent their money would ‘improve accountability for all schools’.
He added: ‘Local authorities are statutorily responsible for ensuring effective financial management in their schools and we are strengthening arrangements for the assurances they provide us with.
‘Academies have more rigorous financial systems in place than maintained schools, and have a statutory requirement to produce independently audited annual accounts.’
The National Union of Teachers said that the report underlined the ‘serious doubts’ that the department would be able to properly regulate academies.
The National Association of Schoolmasters/Union of Women Teachers said Education Secretary Michael Gove had ‘recklessly has swept aside key financial safeguards’ in schools.
