Grange House in Marston, Herefordshire takes 21 pupils aged between eight and 14. The report calls the management "grossly negligent" and says the headteacher, who is also the proprietor, "cannot be considered to be a proper and fit person to be the proprietor." However, the head, Anne Hamer, is not named in the report.
Inspectors said that the premises are not suitable for residential pupils. The school site is within a farm and the immediate farm buildings are in a state of disrepair. Pupils have to pass exposed oil tanks, open barns with discarded agricultural machinery and loose and fallen slates. The report says further health risks are posed by discarded rat traps; unfenced ponds plus, in the school premises, faulty plumbing.
Despite the cold weather, there was no heating in either classrooms or residential and areas.
An inspection by the county's social services found that the school is failing to safeguard and promote the children's welfare.
The brochure for parents promotes the school as being run by the Grange Dyslexia Trust, but the proprietor could not produce any evidence of trust's existence.
A spokeswoman for the DFEE said ministers were urgently considering serving a notice of complaint against the head. If upheld, she would not be able to run another private school.