London city academies set to breach £25m budgets

Almost all of Tony Blair's flagship city academies in London are set to come in above their original budgets, consultants have warned.

A week after Building revealed that the construction costs for the St Paul's and Harefield academies in London had risen over budget, it has emerged that most of the other 60 schools planned for the capital are unlikely to stick to their intended budget of £25m a school.

A senior cost consultant said the average cost of an academy in London was nearer £30m because the easier sites had been built on first.

The source said: "Five or six years ago, the government thought academies would cost £20m, so sponsors would be contributing £2m. What is now happening is that academies are coming in at an average price of £30m. Our first 10 were about £27-32m. The next 10 were £30-35m, and a few were in the range of £35-40m."

The news came as it was revealed that the government had spent £38m on the Bexley Academy in south-east London.

The source said: "Bexley isn't the most expensive one. What will be found is that there will be more difficult sites in London, which will cost more."

The Department for Education and Skills defended this price. It said: "Bexley has a primary and a secondary school with post-16 provision. It has with a total roll of 1820 catering for 4 to 19 year olds. For effectively two schools and a sixth form, £38m is not a large amount of money."

The government originally said academies would cost £20m on average, which allowed the sponsor to hold a 10% stake of £2m and take responsibility for setting the curriculum.

The increased cost of academies has raised questions about whether sponsors should have so much influence. Recently education secretary Ruth Kelly hinted that the money required from sponsors could fall. This week it was also revealed that four of the 27 academies opened so far received the full £2m from their sponsors.

The debate over the academies was fuelled by the revelation that the St Paul's school in Greenwich, south-east London was £3m over budget and Harefield academy in west London was £7m over bodget.

It has since come to light that the West London Academy, Brent Academy in north-west London and Mossbourne Academy in Hackney, east London, are thought to have exceeded £30m.

Consultants also warned that the Building Schools for the Future programme could go over budget in the same way as the academies.

One senior QS said: "Everyone is saying that the academies will be much more expensive than BSF but the funding structures are exactly the same."

The source said that the government's attempts to reduce the cost of a school from £2000/m2 to 1500/m2 would fail because they required high sustainability standards and sprinklers.