New research released today by the Local Government Association reveals councils are raiding other budgets to plug a national ‘black hole’ of at least £1bn in school places funding.

To make sure no child has been left without a place, councils borrowed money, used cash earmarked for other building programmes or created places with money intended to be spent on renovating crumbling school buildings and classrooms.

Capital receipts and section 106 cash is also being syphoned off to help councils tackle the crisis.

Going to extraordinary lengths to ensure there is a place for every child, councils have added extra classes, using temporary buildings and in one case even put a playground on a roof.

The LGA research lays bare the scale of the problem in funding for school places, particularly in London and the Southeast where changing demographics and an increased birth rate have led to particular pressures on school places.

Over three quarters of councils quizzed said central Government funding was insufficient to met demand for school places.

The research found the London Borough of Ealing has added £129m to its Government funding for school places.

This includes £114m from extra borrowing, £11m of funding from other capital budgets and £4m from partnership, Section 106 and revenue funding.

The London Borough of Hillingdon has added £114m to its government funding for school places: £92.9m from raised borrowing and £21.7m from developers.

Another unnamed council has added £125 million to its Government funding for school places, syphoning additional funding from capital receipts, fresh borrowing, developers, diverting capital from other capital programmes and from the revenue account.

Cllr David Simmonds, Chairman of the LGA’s Children and Young People’s Board, said: “This research lays bare the financial impact on councils of providing school places, which stands at more than £1 billion over a five-year period.

“The scale of this black hole is such that the cost of the creation of new school places cannot be met by council taxpayers.”

“The underfunding of free school meals pales in comparison to this but both show that Government’s rhetoric must be matched by its chequebook, rather than leaving local authorities to pick up the tab.”

He added: “The lack of school places is no longer confined to primary schools but is spreading to secondary schools, and across the country we estimate more than 200,000 places will be needed.”

The LGA is also calling for councils to be given a single capital ‘pot’ to enable them to plan creating school places effectively.

It wants councils to be given the powers to create new schools and work locally to find the best academy provider, if this is the preferred choice, and to be given a greater role in judging and approving free school proposals.

In December, the Government committed £2.35bn to provide places up to 2017, but local authorities still face problems because there is not enough money to fund them or not enough space available to build.

Government figures estimate the cost of providing a single place is £15,430.

As well as having to pay for new school places, councils have to pick up the cost of additional work, such as removal of asbestos, when the Education Funding Agency pays for new buildings under the Priority Schools Building Programme, which does not cover the full cost of works.

The shortfall in money provided for school places comes as the Government has pledged more than £1 billion in funding for free school meals for infant children. Last week, LGA research found capital funded from government to build kitchens was at least £25 million short.

Mark Robinson, Group Chief Executive of procurement specialist Scape, said: “This research makes for some very sobering reading and should act as a call to arms for councils and the construction industry.

“This isn’t a question of curriculum or teaching standards; providing enough school places for our children is a fundamental requirement of the education system and it will be a travesty for future generations if this problem is not resolved.

“Education budgets can go a long way if spent wisely and there are a number of new development techniques and methods, such as standardised design, which could quickly improve the current situation if explored with an open mind.”