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Report slams free schools programme
The Government does not have a clear view of how taxpayers' money is being spent on its flagship free schools and is too reliant on whistleblowers to expose problems, a cross-party group of MPs has warned.
In a scathing new report, the Commons Public Accounts Committee suggested that financial management and governance in some of these new schools is not up to scratch.
It also expressed concerns that there have been no bids to open primary free schools in areas that have a high or severe need for places.
The report analyses the success and value for money of the free schools programme and says that the Government has made "clear progress" on the scheme - which is a key part of its education policy - by opening new schools quickly.
But it adds that the measures put in place for checking how these schools are run and whether money is being spent properly are not good enough.
Less than half of free schools submitted their financial accounts for 2011/12, to the Education Funding Agency (EFA), as they are required to, on time, it says.
The MPs highlighted recent governance and management issues at Al-Madinah School in Derby, Discovery New School in Crawley, West Sussex, which was closed down last month, and Kings Science Academy in Bradford.
They said that these cases suggest that the Department for Education (DfE) and EFA's processes for overseeing free schools "are not yet working effectively to ensure that public money is used for the proper purpose".
The report goes on to say that the DfE and the EFA "seem overly reliant on whistleblowers when problems should have been identified through their own audit and review processes".
PAC chair Margaret Hodge, Labour MP for Barking, said: "Recent high-profile failures at Al-Madinah School, Discovery New School and Kings Science Academy demonstrate that the DfE and the EFA's oversight arrangements for free schools are not yet working effectively to ensure that public money is used properly."
She added: "The department and agency have set up an approach to oversight which emphasises schools' autonomy, but standards of financial management and governance in some free schools are clearly not up to scratch.
"The agency relies on high levels of compliance by schools, yet fewer than half of free schools submitted their required financial returns for 2011-12 to the agency on time.
"Whistleblowers played a major role in uncovering recent scandals when problems should have been identified through the agency's monitoring processes."
Ms Hodge said that the Government needs to improve its systems for scrutinising free schools "so that we can follow the taxpayer's pound and satisfy ourselves that public money is being used appropriately".
The report also warns that there have been no applications to open primary free schools in half of districts where there is forecast to be a high or severe need for places in the next few years.
Overall, 42 free schools have opened in areas that have no forecast need for places, with an estimated total building cost of at least £241 million for mainstream schools.
Ms Hodge said: "Around 87% of projected primary places in the free schools opened so far were in districts that had forecast a high or severe need for extra places, but only 19% of secondary places in the free schools opened so far were in such areas.
"We are calling on the Department to set out how, and by when, it will encourage applications from areas with a high or severe forecast need for extra schools places, working with local authorities where appropriate."
According to latest figures, there are now 174 free schools open, with around 116 in the pipeline. It is estimated that around £1.1 billion had been spent on the initiative by March this year.
A Department for Education spokeswoman said: "As the PAC has recognised we have made significant progress in implementing free schools, which are driving up educational standards and giving pupils from all backgrounds the chance to achieve academic excellence.
"Many of the PAC's concerns are misplaced. Free schools are subject to greater scrutiny than council-run schools, they are overwhelmingly located in areas with a shortage of places, and construction costs are 45% lower than the previous school building programmes. Those areas with a shortage of places but with no free schools receive extra basic need funding to make up for it."
She insisted that oversight arrangements are more robust for free schools, with the Government intervening quickly to deal with failure and that financial accountability systems are also more rigorous than for other state schools which means there can be "swift resolution" if any issues arise.
The spokeswoman also said that there is a "clear expectation" for free schools to submit their accounts on time and if they do not do so without a good reason, they could face being issued a Financial Notice to Improve.
Shadow education secretary Tristram Hunt said: "David Cameron's free school programme is damaging school standards. The complete absence of local oversight of these schools, their disproportionately high cost and the failure of many to deliver the quality education we should expect is having a detrimental impact on our children's schooling."