Government-owned property company launched to buy land for new free schools labelled 'obscene waste of money'

New government-owned property purchasing company LocatED will act on behalf of the DfE, with a budget of £2bn

A further 140 new free schools – including some grammars– are to be created as part of the Government’s pledge to create 70,000 new school places (Rex)

A new government-owned property company launched to purchase and develop land for new free schools has been condemned by industry leaders, who have labelled the move an “obscene” waste of taxpayers' money.

LocatED has been set up to acquire land and buildings across England as part of plans set out in the Spring Budget to build 500 new free schools by 2020.

The company will act on behalf of the Department for Education with a budget of £2bn – making it one of the largest purchasers of land in the UK.

Announcing the launch, ministers cited Government analysis of Ofsted figures showing 29 per cent of free schools have been rated outstanding following inspections.

A further 140 new free schools – including some grammar schools – are to be created as part of the Government’s pledge to create 70,000 new school places to keep up with demand from the growing school-age population.

The plans have been met with resistance each step of the way, however, with teachers’ union leaders accusing the Government of prioritising the privileged few over the majority, as well as leaving local authority schools underfunded and in need of repair.

Kevin Courtney, General Secretary of the National Union of Teachers, said the new property company's creation was “deeply despairing” news for teachers and parents.

He said: “While the vast majority of existing schools are balanced on a financial cliff edge, the decision to pour yet more money into the completely discredited free schools project is nothing short of obscene.

“The more the free school project flounders, the more inflated the Government’s rhetoric becomes. The truth is that free schools have fallen some way short of achieving the claims originally made for the project.”

In the last three months a further three free schools have announced their impending closure, bringing the total number of free schools which have closed or partially closed to eight, he added.

“Experience shows that free schools are hugely wasteful and are no way to meet the demand for new places.”

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers added: “LocatED would not have been needed if the Government had allowed local authorities to have the control over the planning for the additional school places that they need.

“We hope that LocatED will behave more responsibly with tax payers’ money when purchasing land and buildings… and that they will be accountable if costs are excessive, such as the £7.3m spent on an unsuitable site which was only worth £3m, or the extortionate rents paid by the Bolton Wanderers Free School.”

A report into capital funding for schools published by the National Audit Office (NAO) last month said in some areas the independently-run, state-funded schools are creating spare capacity that could have “serious financial implications” for the state education sector.

The report suggested at least £6.7bn was needed just to bring all existing school buildings up to a “satisfactory” standard.

The average cost of each of the 175 free school sites bought by the DfE so far stands at £4.9m, with 34 sites having cost more than £10m each, including four that have cost more than £30m.

Commenting on the announcement, Shadow Secretary of State for Education, Angela Rayner, said the company's creation highlighted the "growing desperation" to find suitable schools sites, but said the Government were failing to address "real issues".

"They continue to spend nearly £5m on every land purchase for a free school, and are regularly paying far more than the market rate to secure the land they need," she said.

“Their inefficient and costly approach is failing to provide school places where we need them, and it is failing to deliver value for taxpayers’ money."

Toby Young, Director of New Schools Network, which is to work alongside the DfE in drawing up plans for expansion, restated that the new free schools are the “most economical” way of creating new school places needed for the coming years.

He said: “The most challenging part of opening a new free school is finding a suitable site so I welcome this initiative. The more expertise the Department for Education can draw on in this area, the better.”

LocatED is to consider brownfield, greenfield, mixed-use sites and existing buildings for purchase, ranging from 10,000 to 175,000 square feet, it was announced.

Last month, Treasury officials admitted to The Independent that money set out in the Budget for the creation of new free schools will only fund a fifth of the 70,000 new school places promise.

Suggestions that the remaining money needed could be met using capital budget from existing local authority schools prompted fresh concern from industry leaders, who warned the Prime Minister’s grammar schools project must not come at a cost to other schools.

Commenting on the new property company, schools systems Minister Lord Nash said: “Part of the government’s plan for Britain is building a fairer society, with a good school place for every child. Free schools are playing a vital role in creating those school places.

"They are popular with parents, ensuring thousands more families have the choice of a good local school.

“We need to secure hundreds of new free schools in order to keep pace in creating 600,000 new school places by 2021. LocatED has the skills and expertise to find and secure land and buildings to ensure our free schools ambition becomes a reality."