The rapid expansion of the academy schools programme cost the Department for Education £1bn in additional costs and put its overall financial position under pressure, auditors have found.
A report from the National Audit Office, published today, praised the tenfold increase in academy numbers since May 2010 as a ‘significant achievement’, but noted that the department was not financially prepared for the challenge.It said the DfE had to divert funds from other budgets in order to run and operate the programme at such a pace and stay within its overall spending limit. A total of £8.3bn was spent running the academy programme in the two years from April 2010, but £1bn of this was deemed by the NAO to be ‘additional’ cost.
Academy schools are funded directly by the DfE and, in order to avoid double funding, the department aims to recover funds from local authorities. However, in the two years from April 2010 £350m had not been recovered from councils, contributing to the £1bn in additional costs of running the programme.
Auditors also raised concerns about the financial management of academies themselves, which are largely self-governing. They warned that any financial failures in the schools risked wider reputational damage to the programme. ‘The department needs to weigh this risk carefully in operating a light-touch oversight regime,’ the report said.
NAO head Amyas Morse said: ‘The Department for Education was not sufficiently prepared for the financial implications of such a rapid expansion, or for the challenge of overseeing and monitoring such a large number of new academies.
‘It is too early to conclude on academies’ overall performance and this is something I intend to return to in the future. As the programme continues to expand, the department must build on its efforts to reduce costs and tackle accountability concerns if it is to reduce the risks to value for money.’
Commenting on the NAO’s findings, Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: ‘There appears to be no limit to the amount of money this government is prepared to pour into creating academies, no check on how the funding is spent, and no attempt to take stock when some academies falter.’
She said the £1bn in additional costs had been taken from children’s education in other schools ‘because the government mismanaged the funding for academies and underestimated the costs of conversions’.
These concerns were echoed by Christine Blower, general secretary of the National Union of Teachers, who said: ‘It is absurd for the government to justify spending £8.3bn on academy conversions in two years while at the same time warning of a dire economic situation. Meanwhile, many good state schools are told there’s no money as they stand in a state of disrepair with ever-diminishing support services.’
