Statement in response to the NAO Report by the Minister for Schools and Learners
12 February 2009
The Minister for Schools and Learners, the Rt Hon Jim Knight MP:
“Month-by-month, term-by-term BSF is building momentum – with 80 local authorities and nearly a third of all secondary schools now in the programme. The 50th school has now opened, meaning we are ahead of the revised target that 47 will be open by March. And we are fully committed to seeing BSF through to completion so that education standards are transformed in every school across the country.
“The second annual independent evaluation of BSF by PriceWaterhouseCoopers last month concluded it has “gathered momentum” in the last year and there has been “significant progress” to improve the efficiency. It found that the vast majority of heads involved think that BSF is the key to improving results and expect it to improve teaching; and as well as giving parents, students and local communities access to wider services.
“And it also shows positive feedback from teachers and pupils in four BSF schools up and running – finding that young people are prouder of their schools and the new buildings are raising their aspirations.
“Findings in the National Audit Office (NAO) report are also encouraging.
“It is unequivocal that BSF makes it easier to invest and plan for the long-term – and that the vast majority of local authorities and private contractors say that it is leading to more strategic planning and delivery of school building than previous programmes.
“It shows early evidence that the LEP model is leading to faster and more efficient procurement of school building projects, with time and cost savings, as the programme progresses.
“It finds that Partnerships for Schools has put effective, skilled management in place to run the national programme and is keeping building costs under control – far beyond anything which local authorities could do on their own.
“And it recognises the need for the number of schools in construction and procurement will have to double – we agree, which is why BSF is now accelerating so that by 2011, at least 200 BSF schools will be opening every year. We expect the vast majority of local authorities to completely finish their projects by 2020, with the remaining ones in the final stages of renewing their estate.
“But we acknowledge also, that the NAO identifies a number of other key issues.
“The NAO reports that we were overly optimistic in our assumptions of how quickly the first schools could open. This is an unprecedented project, never attempted before any other country – it is not a race to spend the money as quickly as possible. We have always been upfront about the early delays but we’ve listened and learnt lessons. We want value for every single penny of taxpayer’s money – which is why, as the NAO reports, we insisted those first projects took more time to improve their proposals. The NAO reports early evidence that having BSF is leading to time and cost savings on repeat procurements. We expect this to continue thanks to us cutting further planning time by two months, and reduce costs by up to 30% which will save £250m from the total programme costs.
“The NAO reports that while the estimated total programme costs have risen, it says prices of BSF buildings have been kept firmly under control thanks to our funding arrangements and management. Moreover, the NAO finds that BSF prices are in line with non-BSF building costs. The bulk of this overall rise is down to expanding the entire scope of the programme since its inception. Education policy does not stand still and nor has BSF – that’s why this once-in-a-generation programme now includes academies, Special Educational Needs facilities and cutting carbon emissions. This further investment means no child will miss out from BSF and is integral to transforming the face of education.
“And the NAO reports that the impact of the current financial climate on BSF remains unclear. We are confident that BSF was the last sector to be affected by the economic downturn but is well placed to be the first to come out.
“There are positive signs – BSF projects continue to be signed off with the 29th local authority reaching financial close last week on a £50m PFI deal,; six financial institutions, including new players in BSF, have indicated they are in the market to finance school PFI projects; and we have secured a commitment in principle from the European Investment Bank (EIB) for £300m to support BSF schemes that have PFI investment – which we expect to be approved in the spring. This is alongside our hard work with Treasury and others on alternate and innovative funding models aim to keep private finance available for BSF projects.”
