Major concerns on academy funding and oversight raised by Public Accounts Committee

The BBC reported yesterday that the House of Commons Public Accounts Committee has issued a critical report on academies financing:

Committee chairman Margaret Hodge said inefficient funding systems and poor cost control had driven up the cost of the programme.

"Of the £8.3 billion spent on academies from April 2010 to March 2012, some £1 billion was an additional cost which had to be met by diverting money from other departmental budgets.
"Some of this money had previously been earmarked to support schools struggling with difficult challenges and circumstances. £350 million of the extra £1 billion represented extra expenditure that was never recovered from local authorities."

Part of the overspend will be due to the increase from about 200 open academies in April 2010 to more than 2,886 in March 2012.

But the committee warns the "oversight of academies has had to play catch-up with the rapid growth in academy numbers", and heard concerns of money being allocated twice in some cases.

The report also notes that much of the extra costs of the programme were met out of existing budgets - most notably £95m from a fund previously earmarked for improving underperforming schools.

But it warns that because so many converters were high-performing schools, those that might have needed the extra financial help more had arguably lost out.
It says central government may be "too distant to oversee individual academies effectively", and suggests that things will get tougher as the programme expands further in the future.

"We are sceptical that the department has sufficient resources to properly oversee the expanding programme, especially as schools now joining are less high-performing and may require greater oversight and scrutiny."
It notes that the number of central staff overseeing academies' finance and assurance has doubled since May 2010, while the number of academies has increased tenfold.

It points to some "serious cases of governance failure and financial impropriety in academies" that went undetected by the department's own monitoring.

It warns that oversight systems have not kept pace with academy numbers and expresses concern that only now - more than two years into the expansion programme - has the department started to address value-for-money issues.
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The committee also says there is too little public information about finances at individual academy level.

It calls on the department to publish school level expenditure, including per-pupil funding, for academies and to subject them to the same level of public scrutiny as experienced by regular state schools.