According to a new report into schools capital spending by the National Audit Office, land problems have blown a hole in initial Government costings.

The problem has forced it to buy land speculatively in areas where new schools are needed before plans for schools have even been tabled.

The Government has now set up a new company – called LocatED –  with a £2.5bn warchest to buy new free school sites to ensure it delivers 500 new schools by 2020.

This level of investment puts it in the same spending bracket as the top five home builders in the UK.

While building costs are in line with the priority schools programme, the overall development cost is soaring.

The free schools programme in 2010 was estimated to cost £900m to deliver 315 schools by March 2015.

By that date the Department had actually spent £1.8bn and opened 305 free schools.

Some 233 free schools opened in temporary accommodation at a projected cost of £126m. And six free schools were in temporary accommodation for more than four years.

Another 500 new free schools are due to be complete by September 2020 at a cost of £7bn, taking the total cost to £9.7bn by March 2021.

The NAO warns that the biggest risk to delivering these schools is the availability of suitable sites.

The report also reveals the Government is largely on target to deliver the first phase of the priority school building programme.

The cost of the 214 projects funded by the Department in the PSPB first phase was £2.3bn, £286m more than the original budget.

Of the completed projects, 156 were delivered by the contracted date with the remaining 22 delivered on average two months late.

All but 23 projects will be completed by the December 2017 deadline for the first phase of the programme.

Where delays have occurred, these have mainly been caused by site difficulties and planning issues.