Why it matters: The Department for Education (DfE) announced in December it was "minded to cancel" the project as one of 28 free schools nationwide. This is the first full financial accounting of the project, revealing councils have invested at least £1.86 million.
Suffolk County Council (SCC) is seeking the return of its £752,000 contribution if the project is cancelled and has a meeting scheduled with the DfE to set out its position on the project and the legally restricted Section 106 funds. However, the DfE says Section 106 projects are treated "on a case by case basis" with no guarantee of return.
The legally restricted funds cannot be redirected to other projects if refused.
The details: SCC contributed £752,000 from Section 106 developer funds, while Ipswich Borough Council (IBC) invested £1.108 million in acquiring the former Co-op building in Carr Street and developing a car park, though it has recovered £339,806 through car park revenues, leaving net exposure of approximately £768,000. The DfE has not disclosed its spending, but construction work, asbestos removal and other costs mean the true total is likely well above £2 million.
IBC acquired the former Co-operative department store building in 2017 for £733,000 plus stamp duty, with professional advice costing £20,000. The 1908 Edwardian building occupies a prominent corner position in the town centre and has been vacant since 2010. The council leased the building to the DfE on a long lease, though what happens to that arrangement if the cancellation is confirmed remains unclear.
The council invested £355,000 developing a car park at the rear of the building, which has generated a net surplus of £339,806 (£464,032 income against £124,226 costs). The car park was closed in October 2024 for the planned two-year construction period, though reopening plans are unclear if the project is cancelled.
What's at stake: The £752,000 from SCC came from Section 106 developer contributions – money legally ring-fenced from housing developments to provide school places for children from those new homes. The county council has said that if the DfE refuses to return the funds, "we have no opportunity to redirect it to other projects" due to legal restrictions on how Section 106 money can be used. Even if the funds are returned, the county council would need to seek "legal and planning advice" on how the money could be redirected to alternative school provision.
The decision: The DfE announced on 11 December 2025 it was "minded to cancel" the Central Ipswich Free School as one of 28 free school projects nationwide facing the same review, with the government estimating the cancellations would save around £600 million nationally to redirect to Special Educational Needs and Disabilities (SEND) provision. The department has committed £3 billion in total funding for SEND places.
The DfE said projects are "evaluated in line with consistent criteria focusing on assessing the need for places and value for money", with decisions "based on a review of evidence, including published school capacity data."
The DfE said that since 2010, "over £325 million of capital funding was spent by the department on 67 centrally delivered free schools that subsequently closed – money that could have been invested in addressing urgent condition needs in existing schools."
What they're saying: SCC confirmed it is making a submission to the DfE and has scheduled a meeting with IBC and the DfE to discuss next steps.
Councillor Neil MacDonald, leader of IBC, described the school as "a project conceived by the previous Conservative Government, at a time when it was envisaged there would be an increasing demand for primary school places in central Ipswich."
He added: "Like many of the previous Government's schemes, the project was announced without being backed by funding."
Why it's being cancelled: Councillor MacDonald added that "the primary school pupil population peaked at that time with numbers subsequently reducing each year since" the project was approved in 2021, supporting the DfE's current assessment that the school is no longer needed. This contrasts with statements made in October 2024, when Councillor John Cook told the US-owned Ipswich Star that "primary school places are in short supply on the eastern side of the town centre, and a new primary school is needed" as construction work began.
For context: Section 106 agreements are legal obligations placed on housing developers to fund local infrastructure needed to support new housing, such as schools, roads or healthcare facilities. The money is legally restricted to the specific purpose tied to the planning permission that generated it, which explains why SCC cannot simply redirect the £752,000 to other projects if the DfE refuses to return it.
The Central Ipswich Free School was first proposed in 2017 and received planning permission in 2021 with a target opening of September 2025. The project faced multiple delays including asbestos discovery and complications around preserving a Grade II-listed 1960s mural, with construction finally commencing in October 2024.
SCC, IBC and the proposed school operator have until 30 January to submit additional information to the DfE before a final decision on the cancellation.
What's next: Active Learning Trust, which operates four schools in Ipswich and was originally approved to run the Central Ipswich Free School, confirmed it withdrew from the project several years ago.
Councillor MacDonald said the council "awaits a formal decision from DfE on their intentions for this project" and is "unable to comment further" until that decision is made. If the school does not proceed, he said the council "will work with our partners and stakeholders to agree a shared vision for the future of Carr Street, creating a strategy and masterplan for the revitalisation of this area of the town centre."
The bottom line: Nine years and nearly £2 million later, the Central Ipswich Free School has never opened, the former Co-operative building remains vacant, and the funding may not be recovered as councils await the government's final decision.
