SCHOOLS may be putting themselves at financial risk by converting into independent “academies”, a damning report by MPs warns today.

Financial checks on schools that opt to break away from their local authority are "not fit for purpose", the powerful Commons public accounts committee (PAC) has concluded. Its report found that Whitehall was "overstretched" and lacked the staff to properly scrutinise the 400 schools that have lodged applications to make the switch.

They include West Derby School, in Liverpool, Christleton High School, in Chester, and no fewer than five secondaries in Wirral.

Meanwhile, many of the 407 existing academies have "inadequate financial controls and governance to assure the proper use of public money", because government guidance is being flouted.

One in 20 were forecasting a budget deficit last year – and more than one in four will need "additional financial or managerial support to secure their longer-term financial health".

Margaret Hodge, the PAC's Labour chairman, said: "We are concerned by the increasing risks to the financial management and governance of the academies programme, if there is a rapid expansion.