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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