“‘Vanity project’: debts pile up for English free schools scheme”

“Part of the government’s flagship free schools programme is facing mounting financial difficulties because of its unpopularity with parents and pupils, with schools forced to pay back millions of pounds to the Department for Education and cut staff after failing to attract and retain students.

University technical colleges (UTCs), a type of free school in England that was launched in 2010, ran up debts of £14m last year after many fell short of their forecasts for pupil numbers. Others had to borrow money from the DfE’s funding arm, throwing into question their long-term viability.

Research by the Price Bailey accountancy firm disclosed to the Guardian reveals that 31 out of 40 UTCs with published accounts owe money to the DfE’s education and skills funding agency (ESFA), including 25 schools owing a total of £8.6m after educating fewer pupils than they received funding for through their general annual grant. …

Price Bailey said it had analysed the accounts of 40 of the 50 UTCs operating last year and found that only nine were operating within their budgets, with 31 recording deficits and one or more outstanding debts to the DfE, including 10 owing nearly £4.7m in general loans to cover running costs and three with working capital loans adding up to nearly £1m.”