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10 Summary Managing the expansion of the Academies Programme 18 The Department is taking steps to address the tension highlighted in our previous report between strong stewardship of public money and a ‘light‐touch’ oversight regime, but their effect is not yet clear. The Comptroller and Auditor General qualified the YPLA’s 2011-12 accounts. His report highlighted limitations in the academies assurance framework, and associated compliance and resourcing issues. Nonetheless, almost half of converters responding to our survey feel less free from bureaucracy than they expected before converting. In September 2012, the Department and the EFA introduced changes intended to reduce administrative burden on academies, and place greater reliance on academy auditors to obtain assurance over regularity of expenditure. The Department faces challenges to include academies in its consolidated financial statements for the first time in 2012-13 (paragraphs 3.16–3.17, 3.22–3.26). 19 There is little routine data showing how schools’ cost bases change when they become academies. Our survey suggests converters have experienced increases in some cost types and decreases in others. Many have seen increases related to the additional responsibilities of academy status, such as back-office costs. The Department provides additional Local Authority Central Spend Equivalent Grant (LACSEG) funding towards these services, although some academies report that cost pressures remain. Seventy‐one per cent of converters reported increases in finance and accountancy‐related costs and 49 per cent in insurance, a cost which the Department reimburses to all academies (paragraphs 3.12–3.15, 3.17). 20 Limitations remain in the data for assessing and comparing value for money in academies. Comprehensive and comparable information on academies’ exam performance is widely available, but financial data is not yet fully comparable between academies and maintained schools, nor always reported at individual academy level. The Department has published high-level principles for assessing value for money in schools, and is developing a more detailed framework for academies. This will need to specify baselines, measures and time frames for implementation (paragraphs 3.28–3.33, 3.35). Conclusion on value for money 21 The Department has delivered a fundamental change in the nature of the Academies Programme, through a rapid ten-fold increase in the number of academies since May 2010. This is a significant achievement, although it is too early to conclude on whether this expansion will ultimately deliver value for money. 22 Our previous report suggested that expanding the Programme would increase the scale of risks to value for money. In practice, the Department was unprepared for the financial implications of rapid expansion. Funding arrangements have not operated as anticipated, driving over one-third of the £1.0 billion additional cost of the Programme since April 2010. Rapid cost growth has led to ongoing pressures on the Department’s wider financial position, requiring it to transfer funding from other budgets to manage the resultant risks.
Managing the expansion of the Academies Programme Summary 11 23 In seeking to resolve the tension between academies’ autonomy and public accountability through a light-touch oversight regime, the Department needs to weigh carefully the impact that relatively few failures in governance and control may have on the Programme’s reputation. It needs to build on its increased efforts to address accountability and funding issues in order to reduce risks to value for money as the Programme continues to expand. Recommendations 24 The Department should set out a pathway for how and when it intends to assess the value for money of the Programme, including a baseline position and key information sources. Our 2010 report recommended that the Department set out objectives and measures of success. The Department has published high-level principles for assessing value for money in schools, but has yet to state how or when it will bring key data together to assess the value for money of the Programme. 25 The Department should state clearly how it intends to monitor and address the issues contributing to the Programme’s additional cost. It is planning reforms to school funding (including LACSEG) from 2013/14, and has made progress in areas such as reducing start-up grants and recovering funding from local authorities. It has yet to fully address other recurrent costs, such as insurance, which will otherwise continue to increase as the Programme expands. 26 The Department should explore the extent to which academies are experiencing cost increases or savings, and work with the sector to reduce costs and spread good practice. Our survey found that converters have experienced increases in some cost areas and decreases in others, some of which they ascribe to academy status. 27 The Department should continue working with the sector to emphasise the importance of proper stewardship and compliance while minimising unnecessary burdens. The Comptroller and Auditor General qualified the YPLA 2011-12 accounts owing to lack of assurance over regularity of expenditure. Forty-seven per cent of converters responding to our survey feel less free from bureaucracy than they expected before converting.
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