The Department for Education (DfE) was unprepared for the financial consequences of its decision to dramatically expand the number of academy schools, spending watchdogs have reported today.

Between the Coalition government taking office and March 2012, the DfE spent £8.3bn on the programme, which saw academy numbers soar from a mere 203 in May 2010 to 2,309 by September this year, the National Audit Office (NAO) study notes.

However, in helping so many local authority maintained schools convert to academy status, which gives them greater financial and management freedoms, the auditors calculate the department ran up £1bn on unforeseen additional costs.

Around £350m of the unplanned spending was due to money the department could not recover from local authorities to offset against academy funding, the auditors noted.

Additionally, the significant increase in the number of academies is causing ongoing pressures to the department's ability to remain within its spending limits, and has forced the DfE to reallocate funding from other parts of the education budget to keep pace with a staggering 1,037% expansion rate.

Amyas Morse, head of the NAO, said: ‘The Department for Education was not sufficiently prepared for the financial implications of such a rapid expansion, or for the challenge of overseeing and monitoring such a large number of academies.'

Chair of the powerful Public Accounts Committee, Margaret Hodge, branded as ‘extraordinary' the department's failure to anticipate or plan properly for the financial impact.

‘It even had to repay some £60m to local authorities because central government got its own sums wrong,' Ms Hodge said.