Schools funding agency ‘under pressure from expanding role’

28 Jan 14
Increasing demands are being made of the fledgling Education Funding Agency, but there are questions over its capacity to absorb new responsibilities and how its performance will be monitored, auditors said today

By Vivienne Russell | 29 January 2014

Increasing demands are being made of the fledgling Education Funding Agency, but there are questions over its capacity to absorb new responsibilities and how its performance will be monitored, auditors said today.

Primary school

The agency was set up as an arms-length body by the Department for Education in 2012 to fund maintained schools (via local authorities), academies and sixth-form colleges, as well as funding and managing school building and maintenance programmes. 

Its remit has since expanded to include implementation of the Youth Contract for 16- to 17-year-olds, while its customer base is also growing as the number of academies increases.

In 2012/13, it distributed £51bn of public funds to 7,900 providers, incurring administration costs of more than £50m.

Following a review of the agency’s work, the National Audit Office said its performance had fallen below expectations in some areas.

For instance, a planned survey of the school estate was not completed by the October 2013 deadline because of inconsistent data submitted by local authorities. It also lacked an information strategy and has been hampered by slow progress in improving IT, which in turn affected customer service standards and cost-reduction plans.

The agency is forecasting that the number of providers its funds will rise by 50% to almost 12,000 by 2015/16.

‘Given the agency’s expanding remit and rapidly growing customer base, it must now bring together its existing improvement plans and quickly implement an operating model capable of dealing with the new demands,’ auditor general Amyas Morse said.

‘Our experience of similar bodies in other sectors suggest that the agency might otherwise become overloaded, to the detriment of its own performance and risking value for money across the education system.’

Public Accounts Committee chair Margaret Hodge said the agency had so far performed well, but she urged the department to ensure it understood the delivery capability of the agency and was clear about expectations.

‘I fail to see how the agency can reduce costs by 15% whilst simultaneously expecting to see a 50% increase in demand for its services,’ she said.

‘There is a real danger that the agency will simply become overloaded, putting at risk the value for money it achieves from its £51bn of funding.’

A DfE spokesman said: 'We are pleased that the NAO has recognised the good work that the EFA has done to meet the challenges of the expansion of its role and the growth in the number of academies.

'The EFA has built new systems so it can operate more effectively and oversee a system of financial accountability for academies that is more rigorous than the system for maintained schools. The agency has also achieved significant savings for the public purse in school rebuilding programmes – some 35% cheaper than under the previous government.'

He added that the NAO's recommendations would be considered carefully.

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