Free schools cost three times higher than estimated

Under the programme, which was launched in 2010, the government promised to open new independent schools to meet the needs of local communities and raise standards across the system.

A National Audit Office report, published today, reveals that 174 free schools have been opened over the past three years, providing education to 24,000 pupils, with a further 105 expected to open in September 2014.

While the report states that the cost of the scheme has been kept to a minimum, it reveals that the DfE underestimated how much funding it would require to open free schools.

It says that the DfE was forced to increase its initial £450m fund earmarked for the programme to £1.5bn, after the actual costs of creating free schools – £6.6m per school – was almost double its original estimate.

In response, the DfE revised its approach to the scheme, using existing buildings and reducing specifications, and subsequently reduced costs by around 45 per cent.

Despite needing to increase its funding, the DfE maintains that free schools are value for money and are a “fraction of the £25m” it cost to build schools under Labour’s Building Schools for the Future programme.

Amyas Morse, head of the National Audit Office, praised the DfE for the progress it has made with scheme but says it still has more work to do.

He said: “It is still early days in the programme but the DfE has made clear progress by opening 174 schools, many at a relatively low cost.

“Despite limitations in information, it is also improving its approach with each successive wave of proposals but will need to tackle a rising cost trend as the programme continues to grow.

“The programme’s success and value for money depend on how free schools perform but lessons must be learned systematically from problems that have arisen in a few early wave schools.”

Education minister Elizabeth Truss said: “Free schools are one of this government’s success stories – an innovative response to what local communities want for their children.

“We want to open more high-quality free schools so every child has the chance to go to an excellent local school.”