Examination of Witnesses (Questions 320-338)
MR ROB
SHED, MR
BARRY WHITE,
MR MIKE
BLACKBURN, MR
MARCUS ORLOVSKY
AND MR
NICK KALISPERAS
5 JULY 2006
Q320 Mr Carswell: A final question
on this issue for me: if the planners get it wrong and there is
some evidence, particularly in places like Clacton, that they
may have got it wrong and their projected head counts of school
places are way off course and there are many fewer places needed
in years to come than there are available, this question will
be key. Who is going to be liable for repayments to private sector
partners if a BSF school has to close because of, say, falling
rolls or, perish the thought, poor performance?
Mr Orlovsky: There are two things
here, are there not, there is is it a wasted asset, and if we
are talking about sustainability then we should really be talking
about buildings which have a primary use, which is a school, and
if that was no longer needed as a school what would its secondary
use be, because that then gives us the opportunity of having an
estate of assets where we are not tied to a single use in any
of them, and then we can start making the right decisions. We
consider that to be an absolute fundamental in the design of a
school, that we should be contemplating what could be the alternative
uses. As an example, at this moment what we know is that we have
a large aging population so you could say that maybe a school
will become a long term care home, also consisting of rooms, also
consisting of public spaces, also consisting of entertainment
and dining and having a variety of accessible areas. It is not
completely daft to assume that that could happen, or be a different
sort of training centre or conference centre. We try—in
fact, one of the tools that we use to ask heads that is to say
to a head if you really want the maximum flexibility, one of the
flexibilities is to be able to get out of the building, but you
are not going to be able to get out of it if you just leave behind
a school.
Q321 Chairman: I am conscious that
we have got to cover sustainability in more detail before we finish.
Barry, come back on that.
Mr White: The quick answer to
that is it is important to note that only one school in three
under BSF is actually PFI so that long-term payment only affects
one school in three, the other two are procured through traditional
design and build so they are very much a mixed economy. In either
case it would be unwise to spend £20 million on any building
unless there was a reasonable degree of certainty that it was
going to be needed in the long term. That is why BSF and PfS at
the centre are insisting that local authorities do have that long
term vision in place as part of it before procurement starts.
Q322 Mr Carswell: I am intrigued
by this, given that it is a discussion about sustainability. You
made a comment about the possibility of turning an existing school
into a care home for older people; do those considerations apply
with reference to Bishop's Park in Clacton?
Mr Orlovsky: Behind the scenes,
yes, you can review Bishop's Park and you can see what could it
be used for if it was not a school, but I think that is a conversation
for you to have with Mike Davies about what are its alternative
uses. We were asked by the contractor, Waites, to have a look
at what could be the alternatives for it and we produced some
concepts for that; an awful lot of schools have got that in that
if we create an interesting social space which has then got a
series of compartments, that gives us quite a lot of flexibility.
Chairman: We have to move on to other
aspects of sustainability, not that we have not been talking about
sustainability. David.
Q323 Mr Chaytor: Our inquiry is entitled
"Sustainable Schools" but we have not talked about sustainability
very much. I want to ask specifically Mike about the role of ICT
and sustainability. We talked about ICT earlier in respect of
its impact on teaching and learning and training staff, but what
evidence is there in the contracts that are being developed and
signed so far that ICT is being used effectively to improve the
sustainability of the school in respect of the energy or water
management or waste management, for example?
Mr Blackburn: Bearing in mind
that BSF has only been going for a short period of time, to look
at any degree of sustainability would be incorrect at this moment
in time. You have to apply that question to different schools
and to what has been done elsewhere and have Academies or other
retail programmes that the builders have been involved with, using
different facilities management type of techniques. If you do
the same thing and apply the same principles to a hospital, to
a building like this or a workplace, the answer is absolutely
it does make a significant difference in energy management and
all that.
Q324 Mr Chaytor: Have we got really
good significant examples of where this has happened in the last
two, three or four years?
Mr Blackburn: In terms of BSF
schools it is too early to tell, we have only got the one in Bristol
starting to come through, they are not built yet.
Q325 Chairman: What about the Academies
or previous PFI schemes?
Mr Blackburn: I have not been
involved in any of the Academies, I am afraid, so I have no idea
whether they are or not.
Q326 Mr Chaytor: From BT's point
of view, does BT not have a view on this or some models of good
practice as to how energy management systems could be improved
in schools, and are you absolutely lobbying for this. I would
have thought this would be good business for BT in terms of getting
a feed into these sorts of things.
Mr Blackburn: Yes, and we do with
our partners which tend to be in the building management and the
FM community where we combine ourselves with people like Carillion,
and there would be discussions with Skanska and others as well
about how do we take that technology, how do we take what we have
done in the private sector and apply it to the school environment
to get more sustainable heating, lighting and security which is
another big issue within sustainability. Yes, we are trying that.
Q327 Mr Chaytor: Are there problems
in terms of initial costs as against long term gains? Are the
terms of BSF contracts going to be a barrier to the use of new
technology in this way?
Mr Blackburn: If a contract is
planned correctly and if the finances are planned correctly, then
it should not be a problem at all; it is when you get the two
out of line and you do not allow for a refresh in any shape or
form, or you have to apply that back to the head teacher and say
in three years time you have to go and find it out of your budget,
that will be affordable in three years time. If you can predict
what is going to be affordable in three years time, then it becomes
difficult. Most of the contracts that we get involved with are
10 or 15-year contracts—a 15-year contract will have a minimum
of two refresh periods built into the finances up front so that
everybody knows it is there, at year five there will be a complete
refresh, at year nine there will be a complete refresh. That is
already discussed and debated; what you do not know is what it
is going to be refreshed with, but you do know that there comes
a point where you have the funding in the contract all agreed
and you can now refresh the technology. In the original scope
of BSF it was in, then it was out and I understand now we are
getting authority to put the refresh capability back into the
contracts again—it is a bit in out, in out.
Q328 Mr Chaytor: Could I ask Barry
and/or Rob about the question of whole life costing of these projects,
because previous PFI schemes and some of the Academy projects
have been severely criticised for the very, very high revenue
costs for the whole life of the school. Is that a fair criticism,
have lessons been learned and do you see evidence that in the
BSF contracts there will be a much tighter control of the whole
life costs and the impact on the school's revenue budget over
the 20 or 25 years for example?
Mr Shed: I guess the answer is
that in Bristol we have now committed to a whole life costing
budget for the next 25 years, so the risk is ours and we are now
responsible for managing that risk and delivering the schools
in the correct condition in 25 years time.
Q329 Mr Chaytor: It can be done.
Mr Shed: It can be done. If I
could just pick up some of the points from the previous question
around what are we doing as regards sustainability of these projects,
Bristol has rainwater harvesting and we will reduce the school's
costs by £3,000 a year by the fact that 40% of their water
will come from rainwater collection; we have biomass boilers in
the project, so we will cut down carbon emissions. There are some
very powerful messages coming out of these projects and we are
currently bidding on another London project where the same sort
of standards are being applied, so this is why it is important
to not get too hung up on the criticisms. The industry has come
an awful long way in the last few years and I do believe passionately
that the projects that are now being delivered are a step change.
The one big challenge we have is that half of the estate of course
is refurbished, and it is a much easier question to answer if
you talk about sustainability in new buildings; it is a much more
difficult question to answer as regards refurbishing buildings
because the expectations are up here and with new schools we have
no difficulty in maintaining those expectations, but refurbishment
is another challenge because there are difficulties with some
of the old buildings in actually giving the same sort of standards
as the new buildings. That is an issue we are addressing. Certainly,
as regards the long term sustainability of these buildings, I
believe the schools of the future will be far in excess of other
similar buildings built around local authorities.
Q330 Mr Chaytor: Do you think that
in terms of CO2 emissions—you mentioned CO2 emissions in
the Bristol contract, but that is a local decision in that contract—there
ought to be stronger specifications from the DfES in terms of
CO2 emission guidelines or in terms of energy efficiency standards?
I know we have the BREEAM guidelines as the working document,
but is that good enough, is that going to deliver the energy savings
and improvements in water management that you would expect?
Mr Shed: The real challenge for
all these new buildings is that of course we want to reduce the
energy consumption of the buildings but, for example, in some
of the hospitals we build the demands of comfort and the demands
of patient care are such that we now install cooling into hospitals—
Q331 Mr Chaytor: Should that not
be done by design?
Mr Shed: The biggest cost is the
cost of energy to actually cool the facilities. We all expect
a much higher standard of care in all the facilities that we enter
and that does put pressure on the cost of the energy that actually
maintains that level. The schools are naturally ventilated and
that helps energy consumption, but other facilities—we all
like to work in cool buildings, the consequence of which is you
cool that building by mechanical means and natural ventilation
is not always a viable method of keeping people below a certain
temperature. There are challenges, therefore, and these are the
sorts of challenges we address when we are actually putting together
a design for any given project.
Q332 Mr Chaytor: If we had more buildings
made out of concrete and less out of steel and glass, would that
have a positive effect on carbon emissions?
Mr Shed: I looked at this building
and concrete is a cooling medium, the mass helps to cool the building
and that is why this building has concrete soffits. Our schools
and hospitals are concrete, we generally use a concrete frame.
Chairman: This is supposed to be a sustainable
building and it actually works most of the time. Paul Holmes.
Q333 Paul Holmes: Two quick ones
on the sustainability issue that we have raised: one is that we
have had bits of evidence from various places, including a very
good school that we visited recently, that what people automatically
think of as sustainable issues, like solar panels, are not being
built into schools because they are too expensive up front, even
though they might save money 10 years later. Are they of any relevance,
should we be going more for grey water and that sort of thing?
Mr Shed: As a business one of
Skanska's values is the issue of sustainability and protecting
the environment, so we bring a lot of knowledge and expertise
to this subject. If we use Bristol as an example, we have chosen
those measures that we believe are economically viable and the
issue around collecting solar energy is that it is a more expensive
energy to collect; the issue around collecting wind energy is
that it is more expensive to collect, so what we have tried to
do for Bristol is have a whole range of sustainable solutions
that actually help us. We are doing research at the moment on
wind energy in that we are actually putting wind turbines on some
of our site offices just to do a trial of how much we can generate
and how that viability works, so we are always trying to push
the market to see what can be achieved, but at the moment the
cost of some of these other energy-saving measures are prohibitive
so that essentially they are not sustainable.
Paul Holmes: Finally, it was Marcus
who suggested that LAs should have their vision of where these
schools are going to be in 10, 15, 20 years time so we do not
have a brand new building which in 10 years time is redundant.
Marcus also suggested that if that did happen we should be able
to switch it into being an elderly care centre and things. You
are actually running some schools on 15 or 25 year contracts,
so what happens if 10 years down the line one of your schools
does become surplus to requirements because in the brave new world
of competing schools the pupils have gone elsewhere?
Chairman: Or the demographics change.
Q334 Paul Holmes: What happens to
that school 10 years down the line when there is 15 years still
to pay?
Mr Shed: There is a contract to
pay for another fifteen years, so I guess what would happen is
that consenting adults would sit down and work out another use
for that facility, but there is a binding contract entered into
by the parties on both sides to maintain the school.
Q335 Paul Holmes: And that contract
to you is not just to pay you effectively the mortgage cost of
building the school and paying that back, it is a management and
a profit contract as well?
Mr Shed: It is the cost of repaying
the capital cost initially and the cost of running that school
for 25 years as well.
Q336 Paul Holmes: The profits you
are expecting to make in years 11 to 25, you would get some compensation
back even if the school had to close in 10 years time.
Mr Shed: Yes.
Q337 Chairman: Prime Minister's Questions
is approaching and we are coming to the end. A very quick one:
we went to a new school recently and they said they could not
afford sprinklers, should schools not have sprinklers in case
they catch fire, that is sustainability, is it not? Should they
or should they not, or is it that we are being pressured by the
sprinkling lobby?
Mr White: In every school that
we are building at the moment a sprinkler is economically viable
because the cost of insurance is so much cheaper for sprinklered
schools. We think in future it is very likely that all schools
will have sprinklers.
Q338 Chairman: We have just been
to a brand new school just down the road here and it had no sprinklers.
Mr Shed: The issue of vandalism
is now under control, which was one of the reasons why people
did not put sprinklers in schools.
Chairman: Can I just thank you; this
has been a really good session. Will you stay with us because
it is in your interest and our interest to make this a really
good Report because if we make a seminal Report that adds value
it is really very important. Could you stay with us, and if when
you leave here you think why on earth did that stupid Committee
not ask me this question, please come back to us, or if you have
inspiration and think ah, there is something they ought to know
about or see, we would be very grateful for that help. Thank you
very much for your time.
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