Memorandum submitted by Equion
1. INTRODUCTION
1.1 Equion is pleased to submit written
evidence to the Education and Skills Committee's Inquiry into
public expenditure. This evidence relates to the procurement of
Private Finance Initiative schemes in schools.
1.2 Equion is a specialist investment, funding
and management company, owned by John Laing Plc. Equion specialises
in the procurement of PFI and PPP projects. We often operate independently
of contractors and service providers. Our independence ensures
that the most suitable package for each client can be created
and that there is a seamless transition from one stage of the
project to the next. Equion enjoys working closely with its partners
to complement and add value to their existing expertise.
1.3 During the past five years Equion has
been building up its human and financial resources to manage all
aspects of a project throughout its life cycle, from design and
build, asset and facilities management and service delivery, to
financial and legal close. This expertise has resulted in significant
recent successes across a variety of PFI sectors, which we hope
to build on to meet the needs of the ever-changing education sector.
1.4 Equion's approach to partnership development
is to harness local aspirations through stakeholder interpretation,
thereby producing local solutions that are service led and based
around the needs of pupils, staff, parents and community stakeholders.
2. EXPERIENCE
2.1 Equion has steadily developed its PFI
portfolio. Our success in the health, police, education and defence
sectors together with the acquisition of Hyder and Amey's PFI
portfolios have confirmed our position as a market leader.
Chart showing current portfolio
Chart showing current bid pipeline
2.2 Despite our current share of the education
PFI market being relatively small, it is significant and we intend
to strengthen our position by building on recent successes and
sharing expertise from other sectors. Equion's experience of working
with local stakeholders through our involvement in NHS LIFT has
resulted in a greater understanding of the importance of involving
the community in the scoping and delivery of first class local
services. We have learned that a collaborative approach between
the private sector and all local agencies and stakeholders from
the very start of the process produces the best results. When
developing NHS LIFT partnerships we worked closely with local
police, education providers, transport operators, the local authority
and other key stakeholders to ensure the best design and delivery
of facilities and services. Using our success in this area as
a foundation, we are determined to build successful partnerships
to help deliver the Government's "Building Schools for the
Future" scheme.
2.3 Not only have we been drawing on best
practice that we have learned in related service sectors, such
as health and police, we have also concentrated on building long-term
partnerships in education. This approach at Highlands School in
Enfield has allowed us to develop a strong relationship with the
Local Education Authority. The relationship has been a rewarding
one, as demonstrated by the fact that Equion is now at preferred
bidder stage for the latest grouped schools scheme for Newham
and Enfield.
2.4 Equion is committed to levering in community
involvement within PFI schemes and understanding the complex interactions
that take place within a local area. This knowledge will place
us in an excellent position to address local briefs for education
schemes that are based around the lifelong learning agenda. The
concept of campus style learning villages is growing in popularity
and we believe this type of development allows extremely flexible
facilities to be built that can best meet the educational needs
of an entire community in a cost efficient way.
3. BEST PRACTICE
3.1 Equion strives to continually learn
from its partners, cross-fertilising ideas from one sector to
another, developing pockets of best practice, which can be shared
across the company and with other partners.
3.2 We have learned that the best way to
approach running PFI schemes is to link the skills and experience
that already exist in the public sector to the effective and efficient
working practices of the private sector. An example of this joint
working is the development of a new locker system for the police.
Equion staff realised that the existing police lockers did not
adequately accommodate the different equipment needed by police
officers. Their lockers failed to keep body armour in the condition
required to be effective as they caused creasing which reduced
the efficiency of the product and could potentially have left
officers vulnerable to attack. We worked with the police, building
on their experience of best practice, mocking up designs and examining
the storage requirements for different officers' equipment. This
process of joint working resulted in a product being designed
that exceeded client expectations. The new lockers are a success
by being both functional and relevant to the officers needs. It
is this type of approach, which has resulted in excellent partnerships
and has been developed in all the sectors in which we operate.
3.3 In terms of procurement best practice,
the contract for Highlands school in Enfield was finalised in
just ten months after the project was advertised in the Official
Journal for the European Community. It has long been an aspiration
of both the public and private sectors to minimise the length
of the procurement process and reduce costs. This short procurement
period was achieved as a result of close partnership working,
between Enfield Education Authority and Equion, in overcoming
any difficulties during the closing negotiations. Both parties
were closely focussed on achieving the overall goals of the Education
Authority. The final negotiation process was assisted greatly
by the fact that the Authority had a vision that had been clearly
articulated in the documentation that underpinned the partnership.
3.4 Equion believes that by adopting a flexible
and responsive approach to partnering and by having the ability
to listen genuinely to partners, we can achieve excellence in
partnership projects in the future. We have learned the importance
of input from local stakeholders from the outset of any project.
To us, extensive consultation and facilitating local input into
projects is not a public relations exercise, it is a vital tool
for ensuring we deliver the solutions local communities need.
3.5 We believe in developing the local skills
base wherever possible. Our facilities management team is delivering
new and forward-looking services for the Metropolitan Police Service
in Stations in London and the Specialist Firearms and Public Order
Training Centre in Gravesend and Equion can now use this experience
in other sectors. By allowing our staff to move between sectors,
Equion can give them a more varied and challenging career than
might be possible in traditional roles. This allows us to recruit,
train and retain talented local people. This approach not only
benefits the local community through building the skills base
it means the support Equion provides for key public services is
delivered by people from within the community.
3.6 Equion's experience suggests that the
most effective consortia are those that have flexible structures,
are tailor made to the needs of individual schemes and are supported
by locally sourced teams.
4. CONCLUSION
4.1 Equion welcomes the Government's commitment
to raising standards in education through investment in the PFI
process. We further welcome the commitment to a continued programme
of investment in PFI projects, especially a new tranche of area-based
initiatives that have the capacity to trigger urban renewal through
local partnerships.
4.2 Equion has worked hard to establish
itself as a good partner and we intend to bid for future education
projects. We aim to raise the standard of education through effective
partnerships that deliver better results for our clients.
June 2003
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