Academies 'funded by other budgets'
The Government spent money earmarked for under-performing schools on its academies programme, which has cost £1 billion more than expected over the last two years, a group of MPs has said.
In a new report, the Commons Public Accounts Committee (PAC) found that in a bid to fund the rapid expansion of the initiative, the Government had to draw on budgets set aside for other purposes.
Between April 2010 and March 2012, the Department for Education (DfE) spent £8.3 billion on turning schools into academies, the cross-party group of MPs found. Of this, £1 billion was additional costs that had not been originally budgeted for by the department, and had to be found from elsewhere.
The report said: "A large part of the £1 billion additional cost since April 2010 has been caused by the excessively complex and inefficient academy funding system which has reportedly led to overpayments and errors in payments to academies."
It warned some of the money the DfE relied upon to fund its academies programme had originally been earmarked for other projects, including £95 million intended for improving under-performing schools.
The report said: "There is a risk that the department's decision to solely use this money to create academies - many of which were already high performing - may have been at the expense of weaker non-academy schools which could potentially have benefited from it more. This is a particular risk in the primary sector."
The committee also said it had concerns the DfE could not clearly show academies are funded on a "genuinely equivalent basis" to other schools, suggesting it had heard reports that academies get more funding than other state schools in the same area. "There is a risk that the expectation of increased funding may be a perverse incentive for schools to convert," the report said.
The committee concluded that the value for money of the academies programme will ultimately depend on the impact it has on pupils' educational performance. It suggests that for the DfE to be held to account for its spending on the academies programme, it must ensure every academy trust provides data on its expenditure and costs, and that this information is published.
PAC chairwoman Margaret Hodge said: "The funding system for academies has not operated effectively alongside the local authority system and has made it hard for the department to prove that academies are not receiving more money than they should.
"The department must publish detailed data showing school-level expenditure, including costs per pupil, so that proper comparisons can be made with the data for maintained schools."