01 May 2009 | Martha McKenzie-Minifie
The Building Schools for the Future (BSF) project has been criticised by the National Audit Office (NAO) for an underspend of about £2.4 billion by the Department for Children, Schools and Families.
In its report the NAO pointed to "over-optimistic assumptions" about the speed at which the BSF programme could be rolled out as the primary cause of the large capital balance.
A previous NAO report in February found that only 42 schools had been built by December 2008, far short of the 200 target (Web news, 17 February 2009).
In January, the New Local Government Network think-tank reported that procurement was at the heart of the problems with the BSF's programme and recommended that local authorities should be given more freedom in their approach to purchasing (Web news 22 January 2009).
In its latest findings, the NAO said the department had built up a large capital underspend of about £2.4 billion by 31 March 2009, up from £1.9 billion a year earlier.
It said the department had made progress in improving its financial management but still needed to do more.
"Capital expenditure will need to be carefully managed given the history of underspending and the challenge of bringing forward £924 million of expenditure from 2010-11 to 2009-10 as part of the Government's fiscal stimulus," the report said.
Spending plans had to be realistic, it said, and take into account difficulties private sector partners might find in securing funding in the current economic climate.
"To address some of these difficulties, the Treasury announced in March 2009 that the government would lend funding to Private Finance Initiative projects."