DfE overspends by £1bn on academy expansion

By Neil Puffett

| 22 November 2012

The Department for Education overspent by £1bn on its academy expansion programme in just two years, it has emerged.

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By September this year there were 2,309 academies. Image: Janaki Mahadevan

A report by the National Audit Office found that the DfE had been “unprepared” for the financial implications of a ten-fold increase in academies from 203 in May 2010, to 2,309 in September this year.

The government spending watchdog said the “rapid increase” in the cost of the programme has led to “ongoing pressures” on DfE finances, which means other budgets have been plundered to allow the department to stay within its overall spending limits.

The NAO said the department spent a total of £8.3bn on the academies programme, an overspend of £1bn, between April 2010 and March 2012.

Of this, the DfE was unable to recover £350m from local authorities to offset against the cost of new academies.

Amyas Morse, comptroller and auditor general of the NAO, said the ten-fold increase in the number of academies since May 2010 was “a significant achievement”, but warned that the DfE was unprepared to cope with the success of the scheme.

“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," he said.

News of the overspend, which comes just a week after it emerged that as many as 1,000 jobs are at risk at the DfE, has prompted criticism from Labour, teaching unions, and the public accounts select committee.

Margaret Hodge, chair of the committee, said it was “extraordinary” that the DfE “failed to anticipate or plan properly” for the impact of expansion on its own finances.

Stephen Twigg, Labour’s shadow education secretary, said the report raised serious concerns about the failure of Michael Gove’s department to properly manage the expansion of the academies programme.

“Ministers need to explain what education services have been cut because of this mismanagement,” he said.

Christine Blower, general secretary of the National Union of Teachers, described Education Secretary Michael Gove’s priorities as “all wrong”.

“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,” she said.

“Meanwhile, many good state schools are told there’s no money as they stand in a state of disrepair with ever-diminishing support services.”

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