DfE property firm ‘to pay staff above civil service rates’

Public Accounts Committee says the Department for Education lacks grip on school places plan

By Richard Johnstone

26 Apr 2017

A review of the Department for Education’s capital funding plan for schools has highlighted that a company formed by the department to find and purchase sites for free schools is set to pay staff more than civil servants.

Department for Education forms £2bn property “start-up” to fund free school sites
Academies leading to "material and pervasive" problems with Department for Education accounts, says spending watchdog
Department for Education delays school funding overhaul

The report published on Wednesday by Public Accounts Committee also warned a commitment to open 500 free schools programme by 2020 would divert cash needed for other improvements.

The MPs stated that such a prioritisation was “incoherent” when as many as 420,000 places needed by 2021 to match population growth, and meeting the free schools target could waste public money by providing places where they are not needed.

Since 2010, around 300 free schools have opened under the flagship policy, which allows parents and other groups to develop plans for new schools. Chancellor Philip Hammond announced plans for a further 110 in last month’s Budget.

The DfE has created a state-owned company, called LocatED, to buy up property that can be used as premises for these new schools.

According to MPs, a Treasury review of previous purchases for free school sites by the DfE's Education Funding Agency found it paid nearly 20% more for land for free schools than official valuations.

Landowners are able to push up prices in the knowledge that the department has few sites to choose from, the committee highlighted, but LocatED expects to attract staff with specialist property expertise “by paying them at a higher rate than civil service rates”.

The committee calls on DfE to therefore set out early in the next parliament how it will assess the effectiveness of LocatED “including whether it is able to recruit and retain staff with the specialist skills it requires and the metrics it will use to judge whether LocatED is securing value for money in acquiring sites for free schools”.

Many free schools are in inadequate premises, the report finds, including many without on-site playgrounds or sports facilities. MPs said this “made us question how much of a grip the department really has in providing school places where they are needed”.

Although the DfE will provide capital funding for the school estate, which stood at £4.5bn in 2015-16, there are significant challenges to improve many buildings in poor condition and create additional places, which creates a “tension” with the free schools plan, according to the report.

Although free schools are helping to meet the need for new school places in some areas they are also creating spare capacity elsewhere, with some areas having as much as 20% additional places, according to the review. This has significant financial implications, and the committee called on government to review if prioritising free school expansion is the most coherent and cost-effective way to meet the school places challenge.

Respdonding to the report, the DfE said it would consider the report carefully and respond in due course, and highlighted that more than three-quarters of the free schools approved were in areas where new places were needed.

Read the most recent articles written by Richard Johnstone - Building the future: Steven Boyd on making government property work for the civil service

Share this page