Political scandal, organisational muddle and diminishing funds are threatening to kill off Tony Blair's cherished city academies. George Hay looks at what went wrong, and whether lessons can be learned in time to save them

It looked as if Tony Blair's city academies programme might have finally turned the corner. Just last month, Richard Bowker was brought in from the Strategic Rail Authority to sort out the procurement process, and he had a sensible plan to do just that. It was the usual one for schemes of this size and complexity: to set up a series of frameworks for contractors and consultants and standardise the documentation they used. If that were done successfully, there was a chance that the government's target of 200 academies by 2010 could be met.

Now, at the end of April, we know what was waiting around that corner: a full-scale political scandal. What gave academies their special appeal for new Labour was the sponsorship of successful businessmen from the private sector. Now those sponsors are on the run from accusations that they were in effect using their donations to buy honours; and that, as you will no doubt be aware, is currently a police matter.

Commentators doubt that Blair still has the stomach to identify himself with a project that has picked up such unpalatable associations. And just to show that sod's law is in full operation, it has come to light that several academy projects are on hold after running hugely over budget. Regardless of how the political situation plays out, the problems with the construction programme threaten to bring the whole academies venture into disrepute.

Tony Blair tours St Francis of Assisi Academy in Liverpool, which opened in February

Tony Blair tours St Francis of Assisi Academy in Liverpool, which opened in February

Academic questions

The facts are these. Harefield Academy in Hillingdon, west London, and St Paul's in Greenwich, south-east London, were supposed to cost £20m each, but after a two-stage tender process, St Paul's was priced at £23m and Harefield at £27m.

The design issues at Harefield are reminiscent of those that affected Foster and Partners' Bexley Academy in 2004. At that south London school, the architects thought it would be a good idea to have classrooms with one wall open to the corridor. Teachers, unsurprisingly, knew better and successfully lobbied to fill in the gaps. Sir David Garrard, who sponsored Bexley, graciously covered the cost of new designs. The equivalent problem at Harefield is that the design is oversized and overspecified. The plan presented to the academy trust was for 10,000 m2 when it required only 8950 m2. And some of the systems were unnecessarily high-tech; for example, when teachers tried to darken a classroom by pulling down blinds, the lights automatically went on.

Aedas was the architect at Harefield, and declined to comment. But, like St Paul's architect Jestico + Whiles, Aedas has been involved in successful school projects around the UK. Because of this, insiders prefer to look for faults in the procurement process run by the Department for Education and Skills.

Of the first 27 academies, they say, almost all were signed off too early. What the department should have done was to fund designs to RIBA stage D, which allows greater certainty over cost, but takes longer and is more expensive. What the department did was to fund the designs as far as RIBA stage C then turn them over to a sponsor, who then contributed about £2.5m to take the project forward.

One consultant says: "People saw that this wasn't the way we should be going. The conventional wisdom that they'd be signed off at C so that costs were that much lower and the projects were that much easier to get under way. But there's a lot of risk at RIBA stage C and a lot of problems get de-risked between C and D."

Harefield discovered this the hard way. It was signed off at stage C with a budget of £20m. When Taylor Woodrow came to price the design at the end of last year, it found that it came to about £27m. Since then, the contractor has been trying to value-engineer away the 35% overspend. It has now provided a guaranteed maximum price, which is thought to be £22m, but there is as yet no certainty that the government will go ahead.

Extending the bidding to stage D may help, but it won't eliminate all problems. St Paul's was one of the few academies to sign off at D, but it then encountered other difficulties. Some were site-specific, but others appear to have been caused by administrative errors. Insiders claim, for example, that £750,000 was lost because the DfES did not allow for inflation.

Many insiders blame the underachievement of the DfES on its understaffed team of academies advisers. Because the academies are politically so important, there has been a tendency for the team to intervene in projects such as Harefield. "They've tried to get involved with every detail," says one consultant close to the process, "but it seems like there's only five of them. They've also lost people, so they're trying to run a big programme with people who are just learning the ropes."

Aedas Architect’s design for Harefield Academy came in £7m over the original £20m budget

Aedas Architect’s design for Harefield Academy came in £7m over the original £20m budget

The academy won’t really fly until we have the absolute
best for our kids

Lynn Gadd, principal of Harefield academy

What's new?

Insiders claim that the government has reacted to the academies' construction problems by changing its definition of a "new academy".

"The original intention was for the academies to be opened in new buildings," says a source at Harefield. "But things were too far behind. So some bright spark in the DfES came up with a wheeze."

This, says one QS, was to open academies in existing buildings before the new or refurbished facilities were completed. "It's seen as a way of using the headline statistics to suggest we'll reach the target by 2010, when we'll actually still be building them. For the government, it's a way of hitting the target, but it's a sneaky one."

The DfES argues that the most important criterion for deciding what counts as a new school are educational. "The educational issues have always been paramount," a spokesperson says. "Often academies are in areas where the schools have poor leadership, behavioural problems and a lack of engagement, and so we bring new management and staff in. There's been no change in policy."

But there has been a change of emphasis. Two years ago, all the talk was of exemplar designs, of raising children's morale and attainment by giving them a stimulating physical environment. Bowker's framework for contractors is all about quantity rather than quality. "To date these academies have been design-led," says one consultant. "Unfortunately, they're now becoming contractor-led and dumbed down. The idea of a design-led process has been forgotten in the need to knock them out cheaply."

A number of the 73 academies that have already been timetabled are just like Harefield: existing schools that have been rebranded as academies years before the arrival of their actual premises. A source at one academy sponsor, ARK, echoes the DfES' line that the building is of secondary importance to the "educational transformation". That is not what the teachers say. Lynn Gadd, the principal of Harefield, spends her working day in the mouldy old John Penrose school. "I'm sitting in a building that needs to be replaced quite urgently," she says. "The academy won't really fly until we have the best for our kids."

Gadd may have to wait. Officials at the DfES are considering whether to put the whole project back out to tender, or possibly bring it into Bowker's new framework.

There is a certain irony here. The government is obliged to seek value for taxpayers' money, but retendering could delay the project by up to a year. Ultimately, the DfES might save £2m by building denatured design, but most of that money would be lost to inflation. One schools consultant says: "The DfES is prepared to cut off its nose to spite its face."

Many in the industry suspect that less noble forces are at work. They think DfES officials are simply afraid to ask their political masters, such as schools minister Lord Adonis, for more cash to cover the shortfall. Certainly, if accounts of the design process at Harefield are true, officials have tried to micromanage the design, which means that the DfES bears some responsibility for the same cost overruns that it is complaining about.

Even if officials do go back to the politicians for more money, they may find there is none to be had. "There's lots of talk in the press about there being loads of money for the academies, but the budget is actually very constrained. At the moment, there's not enough money to bail these schemes out," says one education adviser.

Martin Rogers, of educational lobby group TEN, thinks the academies are on their last legs. "There's definitely still the political will from Blair and Adonis but the suggestions are that there isn't much more away from Number 10. The thing is they are very expensive and others may ask whether they are achieving the best outcomes for the most number of disadvantaged children."

It is likely that Harefield will get its academy, but it will be years late and less impressive than the initial designs. With 173 projects to go, there must be one overwhelming question on Tony Blair's mind. The academies programme was supposed to be about using the private sector to help fund dazzling facilities that inspired children and their teachers. But if the money isn't there to do that, if academies are just new names slapped on to dilapidated old venues, and if sponsors are seen as questionable social climbers - then what's the point of them?

A series of unfortunate events …

City academies have attracted controversy since their inception, mainly over fears that their sponsors, who donate about £2m to the £25m cost of building the school, could influence their curriculum. The stock example is the teaching of creationism at the King’s Academy in Middlesbrough and Emmanuel College in Gateshead. But the programme has hit the headlines in recent weeks over the cash-for-honours scandal.

Last week Des Smith, a former adviser to the Specialist Schools and Academies Trust, was arrested after allegedly telling a journalist that large gifts to one or two of the schools might win an OBE, a CBE or knighthood. It is claimed that he added that a peerage would be “a certainty” if a donor gave money to five academies, a contribution of about £10m. Tony Blair is likely to be questioned by police investigating the affair under the Honours (Prevention of Abuses) Act 1925.

Many in the education sector are now concerned that the city academy project, which aims to create 200 schools by 2010, is under threat. Last week, the Association of Head Teachers said the affair “raised questions about the future viability of the project”.

High-profile businessmen who have sponsored academies include two former chairmen of developer Minerva, Sir David Garrard and Andrew Rosenfeld. Garrard pledged £2.4m to the Bexley Academy in south London, one of the first to open, and Rosenfeld is supporting the Stadium Academy in Brent, north London.