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budget strains for academies programme

23 November 2012

Rapid expansion of the academies programme in the last two years has resulted in a £1 billion overspend by the Government, according to a National Audit Office Report.

The report suggests the Department for Education (DfE) was unprepared for the financial implications and monitoring challenges that a surge in academy conversions would bring.

The extra costs included, for example, monies which were transferred to academies that the DfE subsequently failed to recoup from local authorities.

The DfE has defended the extra costs on the basis that academies are proven to 'drive up standards', significant savings have been made elsewhere and the cost of conversions is falling.

Despite the overspend, we anticipate that grant funding for target schools, such as those in the primary sector, will continue to flow. However more generally, the budget strains may well expedite the withdrawal of academy financial incentives, such as the £25,000 conversion grant.

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