Funding system for new schools ‘incoherent’
THE SYSTEM for funding new and expanded schools is “incoherent” and often offers poor value for taxpayers’ money, a damning report by an influential Commons committee has found.
The Commons Public Accounts Committee criticised the Government’s focus on free schools, which were sometimes opened in areas with no shortage of places for pupils while existing schools struggle to make ends meet. The cross-party report also noted that the Department for Education was spending “well over the odds” on free schools, paying almost 20 per cent over official valuations made for land.
The strongly worded report said: “The system for funding new schools and new places in existing schools is increasingly incoherent and too often poor value for money. The Department for Education is spending well over the odds in its bid to create 500 more free schools while other schools are in poor condition.”
The DfE provides capital funding, totalling £4.5bn in 2015-16, to maintain and improve the quality and capacity of the school estate. But the report warned the DfE faced “significant challenges” because many buildings were old and in poor condition. But the Conservatives said new schools and education funding would be at risk with Jeremy Corbyn’s “nonsensical economic policies”.
Free schools, set up by parents or community groups, were helping to meet demand for places in some areas, but in others were opening where there was no shortage of space for pupils. In some areas, local authority-run schools had spare capacity of more than 20 per cent resulting
in funding shortfalls. The report said in the context of severe financial constraints, it was vital that the department used its funding in a more coherent and cost-effective way.
It also said the Government’s pledge to create 500 free schools by 2020 involved spending “significant funds”, even in areas with no shortage of pupil places at a time when existing schools “struggle to live within their budgets and carry out routine maintenance”.
The DfE often buys sites for free schools, but land is often scarce and costly in the areas where new schools are wanted, especially in London.
Some £863m was spent on 175 sites for free schools from 2011 to last year at an average cost of £4.9m, but 24 sites cost more than £10m each, including four that cost more than £30m.
“Land-owners are able to push up prices in the knowledge that the department has few, if any, sites to choose from,” the report said.
“The department is in a weak negotiating position and commonly pays well in excess of the official valuation. On average, it has paid 19 per cent over the official valuation, with 20 sites costing over 60 per cent more.”
The DfE insisted that official valuations were based on past deals for similar premises on the site’s existing use and did not equate to the true market value.