Michael Gove will come under severe scrutiny following the NAO report

Gove responsible for £1bn overspend in rush to create academies

Gove responsible for £1bn overspend in rush to create academies

Michael Gove's reputation came under severe criticism today when it emerged his department had created an estimated £1 billion of additional costs in its rush to expand the academies programme.

The massive overspend will raise serious questions about the Department for Education's ability to control its budget and whether ministers are behaving responsibly in their enthusiasm for the policy.

"Taxpayers have the right to expect a more considered and controlled approach to public spending than the department has so far displayed," public accounts committee chair Margaret Hodge said.

"The department failed to anticipate or plan properly for the impact on its own finances.

"It had to take money from other budgets to protect academies' funding and to help pay for costs such as insurance," she added.

"It has even had to repay some £60 million to local authorities because central government got its own sums wrong."

The discovery of the £1 billion overspend came in a National Audit Office (NAO) report which found the government had spent a total of £8.3 billion on the programme since it came to power.

Around £1 billion of this was overspend, of which £350 million could not be recovered from local authorities to offset the final bill.

The failure to keep proper track of spending is particularly dangerous for the coalition, which still enjoys a lead over Labour when it comes to public perceptions of financial competence.

The amount of money being funnelled towards Gove's pet project is also likely to enrage those campaigning against education cuts, which will have become more severe as the department tries to plug the financial black hole being created by academies.

"There appears to be no limit to the amount of money this government is prepared to pour into creating academies, no check on how the funding is spent, and no attempt to take stock when some academies falter," said Mary Bousted, general secretary of the Association of Teachers and Lecturers.

"When money in the UK is so tight, this unchecked spending of taxpayers' money is appalling."

There are widespread concerns the government's 'light-touch' regulatory system on academies may be creating problems for the future.

The public accounts committee raised the alarm over a system which allows academies themselves to ensure the effectiveness of their use of public money.

Whistleblowers raised the alarm in the case of a few individual academies, but the NAO is concerned problems may be more widespread.

"Financial mismanagement in any school is a real cause for concern, and such failures in academy schools create the risk of wider reputational damage to the programme," the NAO warned.

"The department needs to weigh this risk carefully in operating a light-touch oversight regime."

Academies have expanded by 1,037% since the coalition came to power.