Select Committee on Education and Skills Written Evidence


Memorandum submitted by the Confederation of British Industry (CBI)

INQUIRY INTO SUSTAINABLE SCHOOLS

  1.  The CBI welcomes the opportunity to submit evidence to the Select Committee on the future of schools. Business has a strong interest in the success of the Government's programme of capital and IT investment in schools, in particular through Building Schools for the Future (BSF). As users and funders of schools, we have a stake in ensuring that the revenue from business taxation is efficiently spent and that schools are helping young people prepare for adult life, including employment. Business also has a key role to play in delivering the goals of BSF in a variety of ways including architectural and related consultancy, construction, IT provision, project management and specialist education services.

  2.  The CBI believes that BSF is a once in a generation opportunity, which has the potential to deliver a transformational change in educational outcomes. We support the kind of long-term investment that these programmes represent. At present, however, we are concerned that unless the programme focuses more clearly on its key goals this opportunity may be at risk. In this response, we outline:

    —  BSF needs to focus on educational transformation;

    —  local authorities need help to translate Educational Visions into reality;

    —  the opportunity offered by ICT must be harnessed; and

    —  public sector procurement capacity and bid costs must be addressed for BSF to achieve value for money.

BSF needs to focus on educational transformation

  3.  At the time of its inception the aims of the BSF programme were explicitly outcome-focussed. The programme envisaged using a 10-15 year programme of investment to drive up educational outcomes for children. The CBI welcomed this aim and we still support it. While BSF alone will not result in significant increases in educational attainment, it is an integral part of a wider programme to deliver a world-class education system. There is widespread enthusiasm for the goals of BSF educational transformation amongst stakeholders in central and local government, schools and businesses.

  4.  We share the widespread belief, however, that the core educational objectives of BSF were not sufficiently prioritised during the pathfinder stage of the programme. In part, this may have been due to an understandable desire to start rolling out the programme quickly. But pressure for delivery has led to many commissioners putting greater emphasis on the school construction aspects of the programme rather than the educational outcomes BSF was designed to deliver.

  5.  In recent months, however, Partnerships for Schools (PfS) has emphasised that educational transformation remains at the heart of BSF and is taking steps to ensure that it will be central to future waves of BSF. We welcome the work being done by Russell Andrews, the newly appointed Director of Education and Planning at PfS to reinvigorate the outcome-focussed nature of the scheme. However, anecdotal evidence from CBI members suggests that for many projects in existing waves, the educational goals risk being sidelined. Any perceptions in the supply community, local authorities and schools that BSF is only about constructing new buildings must be clearly addressed now, when a significant number of local authorities in waves 1-3 are still waiting for their Educational Vision to be approved.

  6.  We believe that a key factor in reinvigorating the BSF educational agenda should be a more rigorous approach to the Educational Vision process. Local authorities need to be clearer about the outcomes they want and identify the key drivers needed to achieve them, by identifying their existing capacity and ensuring affordability. At present there are 23 existing BSF projects behind schedule with delays ranging from a few months up to two years.[9] In a significant number of cases this is due to a lack of capacity and procurement skills within the local authority which has resulted in Educational Vision statements being produced that are neither realistic nor affordable. Providers have experienced marked disparities between the procurement ability of local authorities, even those with similar populations and locations. Further, issues of affordability are not coming to light until the Outline Business Case (OBC) stage which then leads to significant delays in the procurement process. In addition, a number of visions have been rejected by DfES for not making satisfactory provisions for Academies.

  7.  Where bids have come to market on time, providers have expressed concerns that BSF is going "too far, too fast to allow educational transformation to bed into the process".[10] The CBI believes a more rigorous approach towards the Educational Vision will help prevent delays occurring at later stages in the process. DfES should make it a clear criterion that all existing BSF projects, as well as those in future waves, should not come to market until the issues set out above have been addressed.

Local authorities need help to translate Educational Visions into reality

  8.  Beyond vision, how best to support local authorities and schools in translating vision into reality with the resources available is vital. BSF has the potential to enable innovation and radical design solutions that support a variety of education methodologies. However, it will require effective management and leadership in the first few years of the programme to ensure that the value that the private sector can bring is harnessed and this innovation comes through. To do this local authorities need to clearly define their role in Local Education Partnerships (LEPs) with regard to educational transformation, including their interaction with the private sector partner. They must engage in regular dialogue with providers, before and during the procurement process, and manage the expectations of schools, to ensure affordability. This presents a significant challenge, a typical comment from those responsible at a local level is: "No one has ever done this before—and there's never enough time."

  9.  Educational transformation requires drive and leadership to ensure that it remains at the heart of the BSF process from Educational Vision stage into procurement and beyond. Partnerships for Schools needs to take a leading role in providing this drive. The CBI welcomes the recent internal reorganisation of Partnership for Schools which more clearly divides the BSF process into education and planning and procurement and delivery. This should improve the process in future waves. However, providers involved in existing projects have expressed concerns that education and ICT advisers who are present at the planning stages have not been represented once procurement is underway, causing the focus to shift to the construction side. PfS should ensure that the educational vision has a champion throughout the procurement process to ensure other interests do not obscure it.

  10.  Questions remain, however, over how to deliver the Educational Vision. BSF should be outcomes-based with the emphasis on what it wants to deliver in terms of higher educational achievement. At this relatively early stage it should be possible to test out a diversity of delivery methods through pilot programmes: for example, giving Local Education Partnerships (LEPs) in successful local authorities an expanded role. Some LEPs could be strongly encouraged to extend the role of their private sector partner beyond building and soft facilities management services to include aspects of educational and pastoral provision. This new use of the mixed market could encourage innovation and would be similar to that successfully employed by the Government in other public service sectors.

The opportunity offered by ICT must be harnessed

  11.  ICT is a key component for delivering educational transformation. It should be at the centre of the BSF vision but at present it is not being fully utilised. BSF should be the catalyst for radical thinking about how to create an optimum environment for learning. Given that it is scheduled to last up to 15 years, BSF should provide real scope for nurturing new ideas and new approaches to design and education delivery. This is particularly the case in respect to how ICT is applied to enhance the learning process, school administration and performance management. Local authorities should be challenged to drive forward educational transformation by maximising the use of ICT in their Educational Visions in their BSF proposals and establishing a clear and integrated approach with schools to deliver it.

  12.  The CBI believes that the existing BSF bidding process does not pay sufficient regard to ICT. The scoring system for BSF bids is such that the ICT component only needs to be adequate for the overall bid to be successful. This means bidders and indeed the commissioning side focus more on construction so that the successful bid may not have the best ICT on offer. We are open to suggestions as to how BSF ensures that ICT has parity of esteem with construction. One possibility could be for ICT providers to join bids at the short list rather than the long list stage of the BSF process, to ensure that the best ICT options are properly considered.

  13.  Partnerships for Schools has issued a baseline specification for ICT and allowed for local innovation and development. This innovation and development must consider the implications of high specification ICT in a PFI context with the limited resources available and how to ensure that ICT providers can add real value to the overall transformational agenda. Partnerships for Schools should work with the ICT providers and other stakeholders to provide further guidance and advice to schools and local authorities on how this can be achieved.

Public sector procurement capacity and bid costs must be addressed for BSF to achieve value for money

  14.  BSF represents £2.2 billion in annual capital investment. It is essential this spending delivers the best possible combination of cost and quality. DfES anticipates that it will yield savings of £538 million by 2007-08. However, there has already been substantial slippage in the timetable. Three years after the start of the programme, less than half of the LEPs in the pathfinder wave have achieved financial close and the costs of this process to local government and business are rising. Construction inflation, especially in the South East, is also growing. These procurement issues need urgent attention if BSF is to deliver value for money.

  15.  The capacity and ability of local authorities to deal with the levels of commercial sophistication needed to create the type of partnership on which the success of BSF depends is of major concern. Anecdotal evidence suggests that there is a marked disparity in procurement capacity and experience between different local authorities. There are some very good local authorities but the overall picture is of shortages of skilled and experienced procurement staff. This has added to the complexity of BSF and increased delays. This is part of a wider concern about public sector procurement ability—the NHS Local Improvement Finance Trusts (LIFT) programme faced similar constraints.

  16.  Local authorities should be encouraged to engage in good procurement for BSF. They should not procure a LEP until Educational Vision and affordability issues are resolved. Partnerships for Schools should support a more standardised approach to the procurement process and work closely with the local authority regional centres of procurement excellence and the DfES Centre for Procurement Performance to ensure that client capacity is utilised and shared across local authorities. This avoids a costly reinvention of the wheel each time, reduces costs and speeds up procurements. At the same time PfS should seek to shorten the procurement process for LEPs and introduce incentives to speed up procurement processes and so reduce the costs incurred to both the public and private sectors.

  17.  Given these capacity constraints the CBI questions whether there is a need for every local authority to have its own Local Education Partnership. Partnerships for Schools could support authorities that share a set of common aims, ethos and are geographically adjacent by allowing them to form joint LEPs. There seems to be no business case for 32 separate LEPs across London when these local authorities often share similar visions and migration of people between authorities is so common. There are similar reasons for limiting the numbers of LEPs set up in other parts of the country too. Larger LEPs will help to alleviate some of the capacity problems on the client side and optimise the bid capacity available in the supply community.

  18.  High bid costs for BSF are already causing concern amongst providers. Companies estimate that the cost of bidding to form a LEP is between £3-5 million. This is comparable to the cost of procuring a £500 million hospital and is true even for smaller LEPs. At present there are over 20 consortia bidding for LEPs but high costs mean that few providers can afford to lose more than a few bids. Without progress in reducing bid costs, companies may begin to leave the market. In these circumstances levels of efficiency and quality would be reduced.

  19.  More can be done to streamline the BSF procurement processes and ensure that value for money is achieved. Standardised documents, produced by PfS, is one solution. A number of documents have been through several iterations, which has led to confusion as to which version is being used in a particular bid. Evidence from CBI members suggests that many authorities are adding unnecessarily to the standardised documents, in ways that do not enhance local innovation, yet increase processing time and costs. Experience from the early waves of BSF is that legal fees are comparable to those in existing PFI projects due to the heavy weight of documentation that BSF involves.

June 2006







9   PfS Update April 2006. Back

10   BSF Supplier firm. Back


 
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