The big test

Right from the start, New Labour saw the school system as the key institution for tackling Britain’s social and economic problems – and establishing its own place in history. Eight years later, the policy framework is finally in place and £5.1bn is to be invested in 2005 and 2006 alone. The scale of this investment is unprecedented, and the ambition behind it stands comparison with the great evolutions in British institutions in the 1880s or 1940s. But it is also a challenging time for the firms that are bidding for work: the programme is so complex and novel that few people really understand how it will work. What is clear is that construction companies can no longer just build a building and fill it with desks.

1 How is the £5.1bn pot of cash to be carved up?

The government has set aside £5.1bn for 2005 and 2006 for “school building capital” (SBC). About £2.9bn is to be spent on the backlog of general repairs and maintenance and the remaining £2.2bn is to be ploughed into Building Schools for the Future, the programme announced by David Miliband in February 2003. The money for the government’s city academies programme, which pre-dates schools for the future, all comes from SBC. At the moment, academies cannot dip into schools for the future funds, but it is widely understood that the DfES is privately planning to roll them into one. As one DfES source who did not want to be named put it: “It’s a political hot potato.”

Confusion not only exists within the industry, but within the department itself. One member of the press office said that if a local education authority wanted to include a city academy within its revised school estate, it must submit its proposals, together with its schools for the future needs, as one package. He later called back to say that that was not the case.

2 What is the City Academies programme?

The first point to make is that they are all earmarked for urban areas where children are disadvantaged and where existing schools are producing bad results. They are all secondary schools.

The government has pledged to invest roughly £20m in each academy, relying on up to £2m extra per school from private sector sponsors.

The plan overall is to deliver 200 schools by 2010, some of which have been refurbished or built on an existing site, and some of which are new. Sixty are earmarked for London. The DfES denies that the programme is running behind schedule or that relations with sponsors have been bad. It also rejects criticism that the news schools – 17 of which have been completed – have shown no real improvement in levels of attendance and bullying.

None of the academies has been a PFI project, and as it stands at the moment, future programmes are not intended to be so either.

There has been much scepticism surrounding the presence of high-profile architects such as Lord Foster who were drafted in to design academies, and question have been raised as to whether the government justify the fees paid out to prestigious firms for a public sector building? Some would argue not, given that Foster does not have much experience in the education sector (see the interview with Valerie Bragg on pages 46-48).

3 What is Building Schools for the Future?

It is the government’s ambitious plan to refurbish or rebuild every single secondary in England school over the next 15 years. Each local authority has been asked to outline its needs, after which the government prioritised areas and made a timetable for delivery. Those schools that had the poorest results and highest number of children eligible for free school meals were catapulted to the top.

The programme is for 3500 secondary schools to be delivered over the 15-year period. This consists of:

• about 140 new-build schools every year, at about £20m each;
• about 95 refurbished schools every year, at about £10m each.

The government has committed itself to spending £2.2bn every year. Of this:

• £1.2bn will be financed using the PFI, mainly for new-build;
• £1bn will come from conventional funding, mainly for refurbishment.

According to Amey, these programmes with require a total of £500m in design fees every year:

• £100m during the risk period of competition;
• £300m after preferred bidder status has been reached but before financial close has been secured;
• £100m during the construction process.

4 What is Partnership 4 Schools?

This was established to deliver the government’s schools for the future programme. Its ownership is split evenly between the DfES and the Partnerships UK, the agency set up to facilitate PFI deals. It was launched in February 2004 and is run by chief executive David Goldstone.

P4S has two main roles:

• To plan and manage the programme to bring all English secondary schools up to 21st-century standards;
• To liaise between the private sector and local authorities to ensure delivery.

5 What is a local education partnership?

The basic principle is that an LEP is a partnership between a local education authority, P4S and the private sector consortium selected to deliver schools across a local education authority. An LEP is divided up as follows: the private sector takes 80%, P4S 10% and the LEAs 10%. However, the private sector is still confused as to how this will work in practice, partly because no actual LEP has yet been formed and also because the precise form they take will depend on the LEA.

6 Is the LEP structure compulsory for all BSF plans?

No. It will not be a simple, unified process.

“It is not always going to be the best thing for all authorities,” says P4S chief David Goldstone. Where P4S does not consider it to be suitable for a particular local authority, a single procurement route is an option. For example, Solihull in the West Midlands is aiming to deliver just four schools under the schools for the future programme, so each will be tendered separately. Stoke council already had an existing contract and relationship with the private sector. Greenwich, in south-east London, will go ahead under a different model. However, for long-term projects where there is not already a programme in place, the LEP is the standard to be adopted.

7 How have the schools for the future pilot projects progressed?

Bradford, Bristol, Sheffield and the three south-east London boroughs of Greenwich, Lewisham and Southwark were earmarked as pilot schemes:

• Bradford has reached a shortlist of three contractors – Mowlem, Amey and joint venture between Interserve and Mott MacDonald;
• Bristol has also reached a shortlist of three – HBG, Skanska and Laing;
• Sheffield last month shortlisted three parties to bid for work on the first four schools – Kier, Inspired Spaces with Carillion as contractor and Paradigm with Taylor Woodrow as construction partner;
• Greenwich–Lewisham–Southwark is still at an earlier stage of procurement.

8 How far has the bidding process advanced on the first wave of schools for the future?

Twelve LEAs that required priority attention were announced in February 2005. Newcastle council is at the most advanced stage within the first phase, and is beating some of the initial pilot schemes too, in its £220m programme to deliver 16 schools. It took just five months from the initial invitation to express interest to shortlisting three parties in May. The three parties were:

• The Aura Learning Communities consortium: Sir Robert McAlpine, Robertson Capital Projects and Parsons Brinckerhoff;
• Environments for Learning, including Interserve;
• Transform Schools – Balfour Beatty and Innisfree.

Solihull, Lancashire and Knowsley have started the early procurement stage but have not reached a shortlist, and Leeds and Leicester are about to enter procurement.

9 Is the government concerned about capacity problems?

According to Goldstone, capacity will be an issue, but only in the longer term. The industry isn’t sure. Adrian Ewer, finance director at John Laing, says that in financial terms there is “no issue”. Regarding construction capacity he says: “It’s out there. Schools are not huge, technically challenging projects, certainly not as challenging as major hospitals, so the pool will be larger.”

John Spanswick, the chief executive of Bovis Europe, disagrees. He says that capacity is indeed an issue and the industry is under a “huge amount of pressure at the moment in terms of resources”.

John Cherrington, a director within Atkins’ architect division, says his company has already been faced with conflict of interest issues that could prevent them accepting some work. “You can start to trip over your

own feet,” he says, citing the example of a group’s QS business sitting on one side of the table as technical adviser, and its architects sat on the other bidding for design work.

10 What is the government doing to limit PFI bid costs?

Not enough is the consensus in the industry. The RIBA, CABE and the Major Contractors Group have all launched initiatives within the past three months to get costs down at an early stage, largely by attempting to find ways to limit what Stephen Ratcliffe, chief executive of the Construction Confederation, describes as “an awful lot of wasted design”.

But the government is at least attempting to address the problem. Under the schools for the future programme, the government has introduced a process to limit the number of designs that have to be submitted on any one bid. For example, in an area where 15 schools need to be built or refurbished, teams will only be required to produce designs for two. The bulk of the design will be produced once the preferred bidder has been chosen and is guaranteed a long-term income. This has already been the case in Glasgow.

The problem is that it is left to the discretion of the local authority to decide whether to offer a deal like that. Spanswick however says that it is still “an attractive equation, because the government has a genuine desire for long-term relationships”.

Two years ago, before the dawning of schools for the future, Bovis opted to stop bidding for PFI schools because of the costs involved – and then there is the example of Kajima, which has already made £80m of losses on PFI schools. Under schools for the future, however, contractors are guaranteed a steady flow of work over a longer period. Contracts and advertisements inviting consortiums to bid for schools have been standardised, as have the bid documents that must be submitted, in order that the private sector becomes familiar with what information is required. This should make future tenders simpler and quicker to process.

11 Can the design of a school affect its educational results?

The DfES says yes. Although school buildings are marginal influences compared with the actual teaching, many of the UK’s schools are not fit for their purpose – for example, in terms of IT facilities, ventilation and so on. And one of the government’s main aims is to improve the morale of teachers and pupils by demonstrating its commitment to the education system.

According to School Works (see question 19), studies have shown that exam results in state schools with good building conditions are on average 17% higher than similar schools elsewhere. Temperature, light levels, air quality, noise levels and acoustics all have a measurable impact on individual performance.

One encouraging example is Kingsdale School in the London borough of Southwark. This was a typical post-war comprehensive in which 60% of its pupils were eligible for free school meals, and 24% of pupils spoke English as a second language. It was given a full-scale makeover beginning in 1998. In 2000, 11% of pupils achieved GCSE grades A*-C, and in 2003, after the refurbishment, this reached 42%.

The good news for the government is that most private sector companies bidding for schools now understand that they have to have educationalists and IT specialists on board, and if they don’t, they have no chance of picking up a contract.

Laing’s Ewer says: “The understanding of education is absolutely essential. It’s not just about building a building.” He rejects the notion that this an inconvenience or a frustration to the business: “It is not a pain,” he says. “The private sector is providing a service and an environment that will be optimal for learning. We are not just talking about bricks and mortar.”

Spanswick agrees with this point: “It is very important that we and others understand the requirements of schools.”

12 Will companies be held to account for exam results?

This is one of the most controversial elements of the whole debate about schools. On the one hand, the government has mooted the idea that one criterion for judging the performance of private sector consortiums will be the academic achievement of a new or refurbished school. It is still unclear whether the private sector will be faced with performance-related targets in exam results and attendance, but in reality this is very unlikely to happen.

Private sector consortiums are showing some backbone and are not willing to take risk on something they have no control over. Cherrington says simply: “The private sector is not responsible for teaching.”

Although contractors and architects accept that it is important to understand more about the education process and how an environment has an impact on teaching and learning, it is not prepared to take risks associated with the quality of teaching. “It is not our desire to get involved in monitoring teaching,” says Spanswick. “We are not in a position to influence that.”

Another factor that makes performance-related pay unlikely is the failure of a similar process introduced as part of the 1990s prisons programme. In the earliest jail schemes, contractors were asked to incorporate the number of cells occupied by prisoners as a performance target. Contractors, unsurprisingly, rejected this on the basis that they had no control over sentencing.

Industry sources argue that there is a limited extent to which the private sector design, construction and management partner can control schooling standards.

13 Have the city academies been brought under the umbrella of the schools for the future programme?

As things stand, no. Academies are entirely traditionally funded and the DfES has gone no further than to say that an LEA’s strategy for the schools for the future programme will have to take into account where the academies fit into the broad plan.

14 How are city academies progressing?

A PriceWaterhouse Coopers report published on behalf of the DfES last month said that teachers at new-build city academies had criticised designers for paying too little attention to the practicalities of educational provision. Their main gripes were about classroom layouts, lack of storage for teaching equipment and insufficient office space for staff preparation. One observation mentioned it had been a mistake to site sports changing rooms on the first floor of buildings because it meant that wet and muddy children walked through the buildings.

Parents and pupils were more positive. Of parents, 96% found the buildings attractive, and eight out of 10 pupils preferred the new buildings and said the resources were better. PWC visited 11 academies, three of which were in new buildings.

14 Will the government’s plans for primary schools be brought under the BSF umbrella?

Not as yet. Once a LEP has been established it has the authority to deliver primary schools, but only if it has separate funding. It cannot use funds designated to the schools for the future programme. Chancellor Gordon Brown pledged in April that the Labour government would rebuild or refurbish 8900 primary schools across England in the next 15 years, investing £9.4bn in the programme. A funding model has yet to be decided upon.

15 What is the government planning to invest in science and engineering?

It is unclear as yet, but Brown last year pledged to establish a 10-year plan to make Britain a leader in science. He has already earmarked an extra £3bn of funds so this is a sector to watch.

In 2000, the Higher Education Funding Council for England announced a £600m first wave of funding for the Scientific Research Infrastructure Fund. In 2002, a second fund of £864.5m was announced. The aim is to spend £475m on science in university infrastructure over the next four years:

• £276m new-builds – 5%
• £175m refurbishments – 39%
• £24m minor works – 56%

16 How does government spending on schools compare with previous years?

• 1996-97 – £700m
• 2000-01 – £2.1bn
• 2005-06 – £5.1bn

17 What is the government planning to spend on further education, including basic skills for adults?

• 2005-06 – £421.6m
• 2006-07 – £426.6m
• 2007 08 – £517.6m

18 What is the government planning to spend on higher education?

• 2005-06 – £649.6m
• 2006-07 – £704.6m
• 2007-08 – £738.6m

19 What is School Works?

It is a not-for-profit company sponsored by the DfES to influence policy and how it is communicated. It runs conferences, workshops, seminars, and works with individual schools and LEAs to establish good practice.