Capital funding for new school places report

28 June 2013

The Public Accounts Committee publishes its 12th Report of this Session which, on the basis of evidence from Chris Wormald, Permanent Secretary to the Department of Transport, examined capital funding for new school places

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

“256,000 new school places are needed by September 2014, but the Department for Education does not know whether the £5 billion it is contributing will be enough to pay for them or even spent to best effect. 

“The Department failed to identify in time the rising demand for school places.  Growth in demand is concentrated in particular areas of the country. Without enough resources to provide new places, some authorities are forced to sacrifice facilities like music rooms or expand classes beyond the statutory 30 children per class.

“The inability of local authorities to require academies and free schools to expand further constrains them.

“The Department does not understand the costs for local authorities in delivering places or the relative value for money of different approaches around the country.

 “The Department believes that the money it is contributing for new school places will cover all the costs. But, in 2012-13, nearly 65 per cent of authorities were having to dip into their maintenance funding to pay for the extra places, storing up unknown maintenance costs for the future.

“What is also being lost in all of this is the effect that different ways of providing new places might have on pupils’ learning. It does not take much imagination to realize that educational opportunities and standards might be diminished if specialist areas, such as music rooms and libraries, are converted into classrooms, poorly performing schools expanded, or playgrounds used to house children in overcrowded demountables.”

Margaret Hodge was speaking as the Committee published its 12th Report of this Session which, on the basis of evidence from Department for Education, examined its distribution of capital funding for new school places. The Committee also visited Gascoigne Primary School and Barking Abbey Secondary School.

Sufficient Places

One of the Department for Education’s (the Department) aims is “to use available capital funding to best effect to provide sufficient places in schools parents want to send their children to.” Local authorities are legally responsible for ensuring that there are sufficient schools, and therefore school places. However, the location and development of new free schools is subject to decisions made by the Department. The Department is responsible for the overall policy and statutory framework and makes a substantial financial contribution to the cost of delivering these places—around £5 billion in capital funding to local authorities over the spending period to March 2015.

In the 2011/12 school year, there were 6.8 million 4 to 16 year olds in state-funded schools in England, of which around 600,000 were in reception classes in primary schools. The number of children entering reception classes has been rising for some years, putting pressure on school places with greater stress falling on particular local authority areas where population growth has accelerated.  Neither the Department nor local authorities anticipated how much and where pupil numbers were rising early enough and therefore failed to adequately plan for the increased demand. As a result the number of children in infant classes of more than 30 has more than doubled in the last 5 years and 20% of primary schools were full or over capacity in May 2012.

Capital Funding

The Department’s funding for additional places is coming out of a significantly reduced capital funding pot. This reduced capital allocation also has to maintain the fabric and condition of school buildings across the country and fund the Government’s new priorities like the establishment of free schools.

The Department has slowly improved its approach to allocating funding but could still do more to target its funding to the areas that need it most, particularly with the new information it plans to collect from local authorities about costs and methods of delivering school places. Costs will vary according to local circumstances including, for example, the cost of land. We are concerned that the scale of financial contributions expected from some local authorities for new school places introduces wider risks to the on-going maintenance of the school estate and may exacerbate pressures on local authorities’ finances.

Value for Money

The Department does not have a good enough understanding of what value for money would look like in the delivery of school places, and whether it is being achieved. In response to fluctuations in local demand local authorities can direct maintained schools to expand or close but do not have this power over academies or free schools. Local authorities need to have mature discussions with all parties, including the academies and free schools, to resolve any mismatch between demand and supply for their communities as a whole. We hope that discussions at local level always prove successful, but the Department needs to be clear about how it will achieve the best value for money solutions in the event that local discussions fail to achieve a resolution.

This has to be in the context that Free Schools and Academies are directly accountable to central Government, but the Government has no mechanism to force them to expand to meet the demand for school places. In addition, the Department does not sufficiently understand the risks to children’s learning and development that may arise as authorities strain the sinews of the school estate to deliver enough places. The imperative to increase the quantity of school places should not be achieved at the expense of quality.

Further Information

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