David Cameron’s plan to expand the academy schools programme brings significant risks for the government’s finances, according to accounts released on Wednesday by official auditors.
In a critical assessment, the Department for Education’s annual accounts have been rated as “adverse” by the National Audit Office, which said there was no clear view of academies’ spending. Adverse is the most negative opinion that an auditor can give.
The NAO’s assessment will be seized upon by critics of Cameron’s plan to force all schools to become academies. Many doubt the DfE’s abilities to manage its finances.
Cameron insisted he would press ahead with the programme after Jeremy Corbyn accused him during prime minister’s questions of attempting an unnecessary and unpopular top-down reorganisation of the education system.
Cameron claimed schools had a “huge amount to gain” from the plans and accused Labour MPs of wanting to stand on a picket line under a banner saying: “Save our failing schools.”
He added: “The truth is, even about outstanding or good schools, we want them to be even better and the truth is academies and greater independence, letting headteachers run their schools, has been hugely effective.”
However, there is persistent speculation that the governmentplans to water down the proposals in the face of opposition by leading Conservatives and the Labour party.
Following prime minister’s questions, a Downing Street source said no timetable had been set for legislation to implement the plans, suggesting it may not be in the Queen’s speech this May.
“We’re talking about a six-year period. Six years is a long period of time,” he said. “Clearly there’s time to discuss these issues and look at concerns.”
The NAO warning about the DfE’s accounts is likely to add to concerns about the affordability of the programme, which has been questioned by Labour.
According to the accounts, there is an escalating risk unless the finances of the department and individual academies are strengthened.
“The department’s policy of autonomy for academies brings with it significant risks if the financial capability of the department and academies are not strengthened; and the financial statements do not present a true and fair view and meet the accountability requirements of parliament,” the accounts said.
“This will become even more significant in the context of the planned expansion of the academy sector.”
The accounts were released nine months late on Wednesday afternoon, even though they were signed off by the NAO’s head, Sir Amyas Morse, days ago.
They are being published more than two months after the statutory deadline following Treasury approval.
The NAO said the level of “error and uncertainty” in the department’s financial statements was “both material and pervasive”.
Auditors said the accounts were late because of the complexity of consolidating 2,824 academy trusts whose accounts run from August to the department’s, which run from April.
Morse also qualified his opinion because the department breaches a limit on spending authorised by parliament.
The department has breached three limits: two are due to the difficulty in forecasting movements on academy property, plant and equipment and the third is because the DfE failed to follow process and seek budgetary cover for changes made to balances previously reported in 2013-14.
The Institute for Fiscal Studies has said converting all schools to academies will entail additional costs. Labour has claimed that the cost of conversion for each school comes to £44,837, including a £25,000 grant paid to schools to cover the expense of conversion for matters such as legal and human resources, software licensing and rebranding.
Morse said: “Providing parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work yet it is failing to do this. As a result, I have today provided an adverse opinion on the truth and fairness of its financial statements.”
A spokesman for the DfE said: “Academies are subject to a rigorous system of accountability and oversight, tougher and more transparent than maintained schools. This is reflected in the NAO’s finding that there are no material inaccuracies in individual academies’ statements. However, the consolidation of thousands of those accounts into the format required by parliament is one of the largest and most complex procedures of its kind.
“All of these accounts are published individually by trusts ensuring they can be held to account by the department and the public.”
