A report from the Audit Commission has found that while some schools are hoarding money in bank accounts, others are left without the funds to fix their crumbling buildings.

School reserves doubled from pound;500 million in 1997 to pound;1 billion in 2001. The rise is partly down to an increasing proportion of funding for buildings now being passed to schools, the report, Improving School Buildings, says.

“Not enough of the resources are targeted to immediately fund the most urgent improvement needs,” says the commission in its second critical report on government policy on school buildings this year.

Last month, it criticised the Government’s flagship private-sector building scheme, saying it provided poor-quality buildings.

In its latest report, the commission acknowledges extra cash has helped improve school buildings. Central government spending has increased from less than pound;1bn in 1997-8 to pound;3bn this year and a projected pound;5.1bn in 2005-6.

But there have been problems with funding arrangements, inadequate local authority support, and inadequate monitoring of schools’ use of cash for buildings.

Half of local authorities’ property services departments are judged unsatisfactory or poor and some authorities have a “lack of understanding” of schools’ needs.

Many headteachers lack the skills necessary to supervise projects and personal experience of domestic building work is not enough, the report warns.

These problems have been exacerbated by shortages of skilled labour and organisational problems in some areas of the building industry, the report says.

A DfES spokesman said that investment was being targeted at the schools who most needed it.

Improving School Buildings is available at www.audit-commission.gov.uk