Statement from PAC Chair on Managing the expansion of the Academies Programme

22 November 2012

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

 The rapid expansion and ongoing costs of the Government’s Academy Programme over the last two years has left the Department for Education with an additional £1 billion bill.

 The decision to change fundamentally the nature of the programme away from one solely directed at struggling schools is up to the Government, but taxpayers have the right to expect a more considered and controlled approach to public spending than the department has so far displayed. The significant cost will have to be considered alongside the performance of academy schools when it comes to judging the overall success of the programme.

The department was caught off guard by the number of schools applying to become academies. But what is more extraordinary is that the department failed to anticipate or plan properly for the impact on its own finances. The department has had to take money from other budgets to protect academies’ funding and to help pay for costs such as insurance. It has even had to repay some £60 million to local authorities because central government got its own sums wrong.

This Committee has previously raised serious concerns about the robustness of the accountability framework for academy schools. The department has chosen to rely on academies themselves to ensure effectiveness and probity in the use of public money. There have already been reports of outrageous misuse of public funds in a few individual academies, some of which went undetected and were only brought to the department’s attention through whistleblowers.

Although there are some signs that the department is starting to get a better grip on the programme, it still expects to overspend its budgets this year and its changes to the financial oversight of academies remain unproven. The department needs to control costs and make sure all academies meet the highest standards of governance. This is essential if Parliament and the public are to have confidence that money is being spent wisely and that there is proper accountability for the use of taxpayers’ money.

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