The government spent millions on setting up its property company charged with finding free-school sites, before announcing its existence.

It has emerged that the Department for Education spent nearly £900,000 developing the controversial company, LocatED, between July 2015 and September 2016.

This was before the DfE had produced its business case for LocatED, which Tes obtained under a Freedom of Information request and which is dated September 2016.

And £2.6 million was also set aside for LocatED in the financial year ending in April 2017. The government announced it was launching LocatEd on 28 March 2017.

In an answer to a parliamentary question, children and families minister Robert Goodwill said: “The Department for Education spent £869,900 on the development of LocatED between July 2015 and 20 September 2016, when LocatED was established as a separate company and listed at Companies House.

“This figure includes the cost of contracted staff who worked on the acquisition of sites as well as setting up LocatED. Acquisition work would have been carried out regardless of the LocatED set up.”

He did not specify how much of the money would have been spent if LocatED had not been set up.

In an FOI response sent to Tes in March, the DfE had stated: “LocatED did not exist in 2015-16 and therefore had no budget.”

‘Millions spent behind closed doors’

In a separate written answer, Mr Goodwill said: “LocatED’s indicative budget for 2016-17 was set at £2.6 million. LocatED’s costs were formally managed as part of the wider Education Funding Agency budget in 2016-17.

“Actual costs incurred by LocatED in 2016-17 will be detailed in their annual report and accounts to be published and laid before both Houses before the statutory deadline of 31 December 2017.”

Shadow education secretary Angela Rayner, who had asked parliamentary questions following a Tes investigation into LocatED, said: “Once again this government’s unaccountable free-schools regime is raising serious questions about how public money is being spent.

“Millions were spent behind closed doors, before the policy was even made public, and the government are not even able to say how much would have been spent on land acquisitions without LocatED being set up.”

“Overpaying for land is a major problem in the government’s inefficient free-schools programme, and now they appear to be spending millions more on a company to buy the land, without being upfront with the taxpayer about it.”

A DfE spokesperson said: “LocatED is saving the taxpayer money by providing the commercial and property market expertise to secure sites more quickly and at better value.

“We are committed to an ambitious free-schools programme that delivers choice, innovation and higher standards for parents. Since 2010, we have opened more than 400 new free schools, which will provide over 234,000 places when at capacity. We know that these schools are popular with parents, with 84 per cent rated as ‘good’ or ‘outstanding’.”

Want to keep up with the latest education news and opinion? Follow Tes on Twitter and Instagram, and like Tes on Facebook