Report says DfE must use funding more cost-effectively and notes 60% of schools are more than 40 years old and in disrepair

The government’s funding of its free schools programme has been denounced as “incoherent and too often poor value for money” in a hard-hitting report by a cross-party committee of senior MPs.

The report by the public accounts committee accuses the Department for Education of spending “over the odds” on unsuitable sites and building free schools in areas where extra places are not always needed.

Meanwhile, it says the existing school estate – much of which is more than 40 years old – is falling into disrepair and would require an estimated £7bn to restore it to a satisfactory condition.



“While the department is spending significant funds in creating 500 more free schools, even in areas with no shortage of places, existing schools struggle to live within their budgets and carry out routine maintenance,” the report says.

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The report, published on Wednesday, comes at a time of growing concern about pressure on school budgets, which are likely to be a key battleground during the forthcoming general election.



The committee chair, Labour’s Meg Hillier, accused the department of wasting taxpayers’ money in its rush to pursue the government’s free school policy, often paying well in excess of official valuations for the sites.

“We’ve got the impression that developers can see the Education Funding Agency coming,” she told the Guardian. “Prices are going up and up.”

According to the report, the education department spent £863m on 175 sites for free schools between 2011 and 2016 – of those 24 individual sites cost more than £10m and four more than £30m. It expects to spend a further £2.5bn on land for schools from 2016-22, putting it in the same spending bracket as UK’s top five home builders.



“Landowners are able to push up prices in the knowledge that the department has few, if any, sites to choose from,” the report states. “The department is in a weak negotiating position and commonly pays well in excess of the official valuation.

“On average, it has paid 19% over the official valuation, with 20 sites costing over 60% more.”

The department said 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.



Meanwhile, despite the vast sums involved, the committee says many free schools are in inadequate premises that lack on-site playgrounds or sports facilities, and as a result pupils have to use public parks and community facilities instead.

At a time when there is pressure on school places, the report also highlights the problems facing local authorities – who are legally responsible for ensuring there are enough school places yet have no direct control of free school or academy places, which are controlled by the department.



In some areas the report says there is spare capacity of more than 20%, while elsewhere there is pressure for places because of a surge in the number of school-age children that will require an additional 420,000 new school places by 2021.

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In a strongly worded summary, the Conservative-dominated committee concluded: “The system for funding new schools and new places in existing schools is increasingly incoherent and too often poor value for money.

“The DfE is spending well over the odds in its bid to create 500 more free schools while other schools are in poor condition. Many free schools are in inadequate premises, including many without on-site playgrounds or sports facilities.”

It went on: “In the context of severe financial constraints it is vital that the department uses its funding in a more coherent and cost-effective way.”

Asked for a comment on the publication of the report, the education department – constrained by rules around civil service neutrality at election time – said : “We will consider the recommendations carefully and respond in due course.”

The department provided capital funding of £4.5bn in 2015-16 to maintain, improve and extend the capacity of the school estate, but the report warned that there are significant challenges as 60% of schools are more than 40 years old.

During its inquiry the committee heard evidence from headteachers about the state of their buildings. One described how on windy days, dust from asbestos ceiling tiles would fall and students had to go to an emergency van to be decontaminated. The school has since moved into a new building.

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers, said the report was “a devastating critique” of the government’s failure to provide sufficient school places and condemned the “exorbitant” cost of setting up free schools often in areas where they are not needed.



“Local authorities are in a catch-22,” she said. “They are responsible for providing sufficient school places, but cannot build schools to meet the needs of the rising pupil population in their area. This is a ludicrous position for them to be in.



“The government must get a grip. It must reinstate local authorities into the planning and provision of school places and demonstrate that funding will be made available to stop school buildings deteriorating further.”

Geoff Barton, general secretary of the Association of School and College Leaders, added: “Creating surplus places is an inefficient use of public money and damages existing schools where spare capacity is created.”

He added: “It is also vital that the next government provides more funding to address the £6.7bn needed to return all existing school buildings to satisfactory or better condition, and that it provides schools with the revenue funding they need for general maintenance.”

Angela Rayner, Labour’s shadow education secretary said the report was a damning verdict on the government’s schools policy. “With the government failing our children so badly, it is no wonder that there are over half a million children packed in super-sized classes.



“When she was shadow education secretary, the prime minister said large classes were a sign that schools were reaching crisis point. It is time for her to face the fact that she has created a crisis in our nation’s schools.”





