NAO Report
on BSF
'This is education's moment'
On Thursday the National Audit Office (NAO) published its report into the progress
of the BSF programme. The report has led to a great deal of negative media coverage
about PfS and the BSF programme. This article looks at exactly what the report says
and the response to media coverage from Jim Knight and Tim Byles made at the Building
Schools Exhibition and Conference 2009 in Manchester on Thursday.
The report focuses on the efficiency and economy of procurement under the BSF programme
together with looking at the planning process and the methods of delivery used at
a national and local level.
The report follows a string of surveys conducted with Local Authorities and private
sector partners and includes case studies of seven Local Authorities that the NAO
visited (being Ealing, Kent, Lewisham, Manchester, Bristol, Solihull and Lancashire
councils). These case studies provide an interesting insight into how these Local
Authorities are implementing BSF and their successes and challenges so far.
Despite some negative press, Schools Minister Jim Knight said this is education’s
moment and that the report is encouraging and there are positive signs that the
programme is now being well managed as momentum builds. ‘This is an unprecedented
project, never attempted before by any other country – it is not a race to spend
the money as quickly as possible. We’ve listened and learnt lessons. We want value
for every single penny of taxpayer’s money’.
Statement in response to the NAO Report by the Chief Executive
of Partnerships for Schools
The Chief Executive of PfS, Tim Byles, used the opportunity
to address delegates at the BSEC conference in Manchester to respond to the NAO
Report and announced that PfS welcome ‘the NAO’s report into BSF and in particular
their endorsement that this unprecedented programme is now being well managed and
that we are keeping costs under control. The report also explicitly recognises that
BSF delivers new schools quicker than previous school building programmes and to
a higher specification.’
‘With 50 schools now open, we are ahead of our delivery
schedule for the current financial year, and to date, no construction works or school
openings have been delayed due to the current economic climate.’
‘We have been resolute in our commitment to learn
lessons from the early days of BSF and will continue to do so to ensure that at
every step we are maximising the impact of taxpayers’ money to deliver the new learning
environments that every pupil, teacher and community deserves.’
Key
Findings
Progress in
the delivery of the programme
The report concludes that ‘the DCSF and PfS were too optimistic in their assumptions
of how quickly the first schools could be delivered, leading to unrealistic expectations’,
although delivery has compared well to previous school building programmes.
The report reveals that by December 2008 only 42 of the planned 200 schools had
been built and that to include all schools in the programme by 2020, 250 schools
will need to be built a year and the number of schools in procurement and construction
at any one time will need to double from 2011 onwards. These figures highlight the
challenges ahead in order to deliver all 3,500 new or refurbished secondary schools
in England by 2020 and the NAO Report warns PfS that it will find it ‘very challenging’
with fifty-four schools due to open in 2009 and 121 in 2010.
The report acknowledges that Local Authorities are being required to spend more
time on improving their proposals to ensure improved quality rather than accelerate
the programme. The PfS streamlining of the strategic planning and procurement processes
however means that the process should be quicker in future. According to the report,
78% of Local Authorities and 86% of companies involved in the BSF programme believe
that it is leading to more strategic procurement of school infrastructure than previous
school building programmes.
As highlighted in media coverage, the report points out that there has been an increase
in the estimated total costs of the programme of between £52 billion and £55 billion
(which is £7 billion to £10 billion more than was estimated at the outset of the
programme and a 16 to 23% increase from previous estimates). This increase however
is largely due to the increased scope of the programme to include Academies, Special
Education Needs facilities, Voluntary Aided schools and carbon reduction measures.
Local Delivery Arrangements
The report suggests that early evidence shows that LEPs
can lead to time and cost savings on repeat procurements, although the first LEPs
found it difficult to establish effective working arrangements and were more costly
than necessary.
The report takes a historical review and highlights the lessons that have been learned
and that many of the perceived problems in the early days have been addressed.
National coordination of BSF
The report highlights the benefits of national coordination
by PfS that has provided ‘national leadership’ and has exercised effective control
over the overall scope, flow and cost of the programme and effective and structured
programme management.
Conclusion on value for money
The report assesses the main challenges to securing value for money which it believes
revolve around increasing the pace of delivery, managing relationships in a complex
delivery chain, requiring buy in from a wide range of public and private sector
parties and securing adequate cost assurance through the effective use of benchmarking,
continuous improvement targets and market testing.
In view of this, contractors’ ten year exclusivity demonstrates the need to be aware
that exclusivity arrangements could make it harder to price projects economically,
as the private sector partner will not typically need to demonstrate efficiencies
by competing against rivals. To mitigate this risk, Local Authorities will need
to seek alternative sources of assurance over the value for money of individual
project budgets. The forms of assurance can include comparison to national benchmarks
and the original cost schedules from contractors when they initially competed to
join the LEP and market testing after five years.
Recommendations
Tim Burr, head of the National Audit Office, said:
‘Building Schools for the Future is a highly ambitious £55 billion programme. Converting
that ambition to reality requires robust planning, close cost control and making
a success of complex long-term partnerships. Partnerships for Schools and the Department
[DCSF] were too optimistic in their early plans though programme management has
since improved. But it remains a real challenge, in difficult market conditions,
to deliver the 250 schools a year that will be needed, to include all schools by
2020 as currently planned.’
The report recommends that Local Authorities introduce a system to record and monitor
the benefits desired for each BSF school and project, keep that system up to date
and use it to track and help realise benefits. PfS is advised to monitor the costs
of establishing and using a LEP, disseminate good practice and streamline and standardise
the process to help Local Authorities cut costs and make procurement quicker. The
report also encourages PfS to establish a strategy to increase the skills available
to BSF through the provision of commercial and project management training.
To view the statement in response to the NAO Report by the Chief Executive of Partnerships
for Schools
click here
To view the statement in response to the NAO Report by the Minister for Schools
and Learners
click here
To view the full NAO report
click here
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For More Information Contact:
Anna Shadbolt
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email:
Anna
For a full printable version of this article please
click here
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