Select Committee on Education and Skills Minutes of Evidence


Annex 1

SUSTAINABLE SCHOOL BUILDINGS: KEY ISSUES

Briefing for HM Treasury

Sustainable Development Commission, November 2006

Why this paper?

  England's schools are currently undergoing a major programme of capital investment, bringing with it tremendous opportunities for building sustainable schools, which can act as showcases of sustainable development in their communities. Over £2 billion per year is being invested in rebuilding or refurbishing all secondary schools through the Building Schools for the Future (BSF) programme, and a Primary Capital Programme to rebuild or refurbish half of primary schools will be launched shortly. These programmes therefore offer a huge opportunity to put sustainable procurement into practice and make a reality of whole life value.

  The UK's climate change goal is to reduce carbon emissions by 60% by 2050. In the face of rising consumption, this is a major challenge and will require significant effort from all sectors. Even then achieving this target is unlikely to be sufficient: there is already increasing evidence that reductions in the order of 80-90% will be required by 2050 or sooner. The Government is committed to leading by example and a clear commitment in a major public building programme will send a powerful message to the private sector that Government is committed to early action on meeting this goal. The BSF is a unique opportunity: it is unlikely that there will be another overhaul of the school estate before 2050.

  A recent scoping study commissioned by the DfES with the SDC investigated the total carbon footprint of the schools estate—including emissions from energy use in school buildings, commuting to school and procurement activities. The scoping study shows that while the schools estate contributes 2% to national carbon emissions, it represents almost 15% of UK public sector emissions. Half of the emissions that schools produce derive from energy use within school buildings, which can be directly influenced by capital investment.[4]

  Schools spend a significant amount of money on heating and powering buildings. Primary schools each spend on average £6,300/year on energy, and secondary schools each spend £39,000-£55,000/year on energy,[5] the latter is comparable to the cost of a teacher. Volatile energy and water prices mean schools may be at risk of unaffordable bills if they are not safeguarded through well designed efficient school buildings. Further, the extended schools programme will increase energy costs for buildings by up to 40% due to increased opening hours of school buildings.

  Through the BSF programme half of all secondary schools will be rebuilt, and 35% will undergo major refurbishments. 15% of secondary schools will undergo minor refurb without any energy efficiency improvements required.

What do we think needs to be done?

  The Sustainable Development Commission is a aware that the schools programme is being put into place in a way that is delivering sub-optimal outcomes for sustainable development, and we list below the actions we believe Government needs to put in place to deliver a change in focus. Evidence from existing school building projects reveals that the wider benefits of a sustainable development approach is not being factored into funding decisions. Our advice focuses on the following areas:

    —  The use of whole life costing for wider sustainability benefits.

    —  Funding mechanisms to ensure long term energy and carbon savings can be delivered.

    —  Adjusting the design of the capital programmes to enable improved delivery.

    —  An outcome focus to evaluate whether the outcomes will align with broader sustainable development goals.

  These are summarised below and the rest of this paper develops these in some further detail. Attached at the Annex is an analysis of the current BREEAM Schools, which is the basis for BSF schools design, and this explores some of the inadequacies of the standard from a sustainable development perspective.

SUMMARY OF RECOMMENDATIONS

1.   Research

  Commission research into the whole-life costs and benefits to schools and their communities of sustainable building measures. We know the score on energy efficiency, but the benefits of investments in water, waste, travel, food etc. are less quantified.

2.   Invest to save

  Put in place a mechanism to fund sustainable buildings and grounds investment in new and existing schools, based around the whole-life cost reduction model identified above. The SDC has identified three options:

    (a)  The Government funds a national invest to save scheme since benefits arise across departmental boundaries (eg DH benefits of sustainable travel and food; Defra benefits from reduced energy use).

    (b)  The Government matches local authority (or school-level) contributions (like current Salix scheme co-funded by Carbon Trust) to create a rolling fund held locally that can be used to invest in measures identified through the research above.[6]

    (c)  Third party funding is used to finance specific sustainability measures, ie schools/local authorities partner with specialist Energy Services Companies (ESCOs) which can provide capital funding for the sustainable energy systems and take on operational/maintenance risk in return for a long term energy supply contract. This approach could be expanded to cover a range of utilities including water and waste, but is unlikely to be a model to finance wider sustainability measures.

3.   Design of BSF and other capital programmes

  Make the following adjustments in BSF/other capital programmes to drive system change:

    (a)  Extend the lifetime of the BSF programme from 15 to 20 years. In other words spend the same amount each year on creating fewer, higher-quality, schools, but continue beyond the current end date of 2018 to ensure the same number of schools benefit to a higher standard.

    (b)  Re-evaluate PFI contracting arrangements to build in stronger incentives for meeting sustainability goals. The 25-30 year lifetime of a PFI contract is clearly less than the expected lifetime of a school building, but should allow whole life savings to be made on significant resource efficiency measures. Unfortunately, PFI investment decisions are commonly made on the basis of much shorter timescales.

    (c)  Develop a much bolder, and more absolute, minimum standard for school buildings—ie a Code for Sustainable Schools—to replace the current BREEAM Schools standard and other ad hoc guidance.

4.   Focus on outcomes

  Current Government efforts to support sustainable school design are input rather than outcome focused. Hence it is currently unclear how a programme like BSF will contribute to macro-level sustainable goals like carbon emissions reductions. This is a highly significant weakness: BSF should be working towards an explicit vision that is aligned with Government strategy on sustainable development.

    (a)  Government should set out a national strategy for the environmental performance of the schools estate.

    (b)  This should include bold targets for 2010, 2015 and 2020 and explain how the various forms of capital investment will help achieve them.

    (c)  Targets should cover at least carbon emissions (including carbon neutral status), water demand, waste production and travel management.

    (d)  In the area of carbon emissions, they could mirror central govt commitments to carbon neutrality by 2012.

What next?

  The Sustainable Development Commission would welcome discussion with HMT officials to explore these ideas further. The SDC Chair, Jonathon Porritt is meeting with the Stephen Timms, Chief Secretary to the Treasury, on 7 November, and will almost certainly raise some of these issues at that meeting.

SUSTAINABLE SCHOOLS

  We need to make a radical impact on children's understanding and experience of sustainable development if they are to develop the life skills needed to participate in a sustainable society. Formal education has a crucial role to play in promoting sustainable development, both in raising awareness, forming values and developing skills.

  Promoting sustainable development in schools means integrating high standards of achievement and behaviour with the goals of healthy living, environmental awareness, community involvement and citizenship—many of the same aspirations as Every Child Matters.

  The DfES Sustainable Schools strategy[7]—consulted on over the summer 2006—proposes a framework for sustainable development in schools through eight sustainability "doorways" as follows:
1  Food and drink 5  Buildings and grounds
2  Energy and water6  Inclusion and participation
3  Travel and traffic7  Local well-being
4  Purchasing and waste8  Global dimension


  A strong theme within the DfES Sustainable Schools strategy is that school buildings, grounds and the local surroundings offer a resource for learning about real issues in real places among real people as a natural part of their education.

SCHOOLS AND CLIMATE CHANGE

  The UK Sustainable Development Strategy states that "the Building Schools for the Future programme will ensure that all new schools and Academies will be models for sustainable development." And further that it "provides a valuable opportunity for increasing the efficiency of the school building stock".[8]

  One particular area of interest is the contribution that BSF will make to reducing the carbon footprint of the schools estate, and to reducing emissions in line with the Government's Climate Change Programme. Half of secondary schools will be rebuilt through BSF and 35% will undergo major refurbishment. These schools will be required to meet the carbon performance standards of the Building Regulations. 15% of secondary schools (500 schools) will undergo "minor refurbishment" without any energy efficiency improvement required.

Energy Efficiency

  Sustainable Development Commission research shows there are opportunities for maximising the sustainability benefits from the schools' building programme through introducing energy efficiency measures into these schools. They will save 5,000 tonnes of carbon (tC) per year, with a five year payback, after which they would benefit from an average of £5,000 cost savings per year. This will be achieved through low cost measures such as installing improved energy controls, improved lighting, insulated pipework and draught-proofing.

Renewables

  On site renewable technologies such as micro-wind, photovoltaics, solar water heating and biomass heating can raise awareness in schools and their communities and contribute to the commercialisation of microgeneration technology.

  Using microgeneration as demonstration technologies in just 10% of the 3,000 secondary and 9,000 primary schools due for major refurbishment/rebuild would save at least 23,400 tC with payback on the capital cost within the timescale of a PFI contract (25-30 years—without grant funding). A £50 million capital grant stream has been announced for the installation of microgeneration technologies for local housing authorities, housing associations, schools and other public sector buildings and charitable bodies. Criteria for award of grant funding have not yet been released, so it is not clear how many schools will be able to benefit from funding for microgeneration.

  As this funding is very unlikely to cover 100% of microgeneration installation costs, match funding will need to be found by schools.

BREEAM SCHOOLS

    —  The DfES's response to the sustainability agenda has been to make it a condition of capital funding that new build and refurbishment projects achieve at least a "very good" rating under the BRE's environmental assessment method for schools "BREEAM Schools".

    —  The SDC has explored the eight DfES doorways in terms of how they could be supported by sustainable school building design. This analysis is included as an Annex in this paper. The role played by the BREEAM Schools standard is also described. Potential targets for a vision for the school estate are also suggested—the SDC is initiating a process to develop a vision so this is work in progress.

    —  This brief analysis suggests that BREEAM Schools does encourage incremental improvement in environmental design of school buildings, beyond the statutory minimum of the Building Regulations and DfES Building Bulletins, but by itself BREEAM is not sufficient to deliver sustainable schools across the piece. Furthermore:

    —  BREEAM Schools does not offer a vision of sustainable school buildings that those commissioning, designing and constructing can work towards. One consequence is that we do not know how BSF will contribute as a whole to, for example, carbon emissions reduction, waste minimisation, water consumption and sustainable travel (for example, we cannot know if carbon emissions will increase or decrease).

    —  BREEAM Schools is a flexible standard allowing credits to be scored in any area. The tradability on key resource efficiency areas such as energy and water consumption should be reduced to set minimum standards for key resource efficiency criteria. This would mean that all projects would have to achieve a defined energy efficiency/carbon reduction standard above the regulatory minimum. The development of the Code for Sustainable Homes[9] is tackling this weakness.

    —  BREEAM Schools does not address areas of the built environment that would contribute to the "food and drink" doorway, identified in the Sustainable Schools consultation. It could also incentivise higher performance on other doorways such as "local wellbeing" and "global dimension".

    —  In many priority areas, BREEAM Schools does not incentivise higher performance above the credit thresholds—ie it rewards designs that incorporate cycle parking for 10% of pupils, but does not give any incentive to increase facilities towards 100% of pupils.

    —  The DfES has not identified a vision for the contribution of the transformation of the schools estate to "macro" UK sustainable development goals, and so intervention is being implemented on a piecemeal basis. The SDC recommends that a vision (plus associated action plan and guidance) should be developed and agreed immediately for the schools estate at 2020. We recommend this work is undertaken in cooperation with industry, client and policy stakeholders to encourage buy-in to the outcomes.

    —  We consider that a radical review of the standards in BSF and other capital programmes will be necessary to deliver sustainable schools. Such a review would take in BREEAM alongside the range of other requirements, goals, bulletins, standards and guidance that has become associated with capital investment in schools.

FUNDING AND WHOLE LIFE VALUE

    —  Schools capital and operational budgets have traditionally been kept separate, yet the concept of procuring for whole life value blurs this distinction. School buildings should be financed to deliver the best value to pupils and their communities over the life of the building. To realise these sustainability benefits means ensuring that capital and running costs can be looked at together—whereas these have traditionally been split in the schools funding framework even for PFI contracts. It means moving away from artificial limits—such as fixed budgets per m2 of school floor area.

    —  Whole life costing is the practice of looking at the cost of building, maintaining and running a building across its whole life, rather than just the build cost. This funding approach is supported by HM Treasury, who would in general expect departments to factor in such best practice across their own capital programme. The situation is different with BSF, however, as the DfES and HM Treasury signed up to a 15-year programme to rebuild or remodel every secondary school in the country. We understand that any rethink involving a higher initial build-cost would be very likely to affect the length of the BSF programme and would therefore need to be agreed across Government.

    —  The Private Finance Initiative (PFI) is being used to finance the majority of the new build schools in BSF. In theory, PFI supports whole life costing as the responsibility (and risk) of both building and maintaining/operating the building over 25 years is held by private sector contractors. As such, they are incentivised to invest in energy-saving and other cost reducing measures (eg durable or low maintenance elements), as these will, over time, contribute to increased profits. In practice, many PFI companies keep their capital and revenue budgets separate, only consider very short paybacks, and miss the opportunities that exist to optimise sustainable design over the buildings' lifetime.

    —  The majority of the BSF refurbishments are procured conventionally. DfES do not fund this at whole-life levels, and whilst it encourages local authorities to do so, this is not mandatory. This means that for the 50% of secondary schools that are being refurbished, there is no means in place for schools to invest additional capital up front in order to protect themselves from rising utilities costs in future, or to maximise their contribution to wider sustainability goals.

    —  Schools themselves do have an incentive to invest in whole-life measures as the pay back is directly to their budgets. However, they are constrained by both a lack of awareness of basic energy-saving measures, and insufficient funding for major works. Many schools do not have the capacity or inclination to make significant sustainability interventions.

    —  Not all sustainable design features will provide a whole-life financial return directly to schools, PFI companies or local authorities, yet they may produce real health, environmental and economic benefits to communities and the wider public sector. Examples include school transport, catering, food growing, conservation, or sustainable technologies with long pay back periods. Many of these features link directly to the goals of Every Child Matters, children's achievement and government strategies and goals around sustainable development and communities.

    —  The various procurement methods and financing mechanisms being used in schools capital investment should be reviewed and strengthened so that no school project aspiring to increase its contribution to sustainable development is denied that opportunity.

RECOMMENDATIONS FOR FINANCING SUSTAINABLE SCHOOLS

1.   Research

    —  Commission research into the whole-life costs and benefits to schools and their communities of sustainable building measures. We know the score on energy efficiency, but the benefits of investments in water, waste, travel, food etc are less quantified.

2.   Invest to save

    —  Put in place a mechanism to fund sustainable buildings and grounds investment in new and existing schools, based around the whole-life cost reduction model identified above. The SDC has identified three options:

    (d)  The Government funds a national invest to save scheme since benefits arise across departmental boundaries (eg DH benefits of sustainable travel and food; Defra benefits from reduced energy use).

    (e)  The Government matches local authority (or school-level) contributions (like current Salix scheme co-funded by Carbon Trust) to create a rolling fund held locally that can be used to invest in measures identified through the research above.[10]

    (f)  Third party funding is used to finance specific sustainability measures, ie schools/local authorities partner with specialist Energy Services Companies (ESCOs) which can provide capital funding for the sustainable energy systems and take on operational/maintenance risk in return for a long term energy supply contract. This approach could be expanded to cover a range of utilities including water and waste, but is unlikely to be a model to finance wider sustainability measures.

3.   Design of BSF and other capital programmes

    —  Make the following adjustments in BSF/other capital programmes to drive system change:

    (a)  Extend the lifetime of the BSF programme from 15 to 20 years. In other words spend the same amount each year on creating fewer, higher-quality, schools, but continue past the current end date of 2018 to ensure the same number of schools benefit.

    (b)  Re-evaluate PFI contracting arrangements to build in stronger incentives for meeting sustainability goals. The 25-30 year lifetime of a PFI contract is clearly less than the expected lifetime of a school building, but should allow whole life savings to be made on significant resource efficiency measures. Unfortunately, PFI investment decisions are commonly made on the basis of much shorter timescales.

    (c)  Develop a much bolder, and more absolute, minimum standard for school buildings—ie a Code for Sustainable Schools—to replace the current BREEAM Schools standard and other ad hoc guidance.

4.   Focus on outcomes

    —  As explained previously, current Government efforts to support sustainable school design are input rather than outcome focused. Hence it is currently unclear how a programme like BSF will contribute to macro-level sustainable goals like carbon emissions reductions. This is a highly significant weakness: BSF should be working towards an explicit vision that is aligned with Government strategy on sustainable development.

    (a)  Government should set out a national strategy for the environmental performance of the schools estate, including bold targets for 2010, 2015 and 2020, and explain how the various forms of capital investment will help achieve them.

    (b)  Targets should cover at least carbon emissions (including carbon neutral goal), water demand, waste production and travel management, and should mirror central government commitments such as carbon neutrality by 2012.

CONCLUSION

    —  The BSF programme provides a unique opportunity for the schools estate to contribute significantly to sustainable development goals. Schools are in a key position to influence learning and lifestyles of pupils and also the wider communities in which they are located.

    —  The standards that have been established for BSF and the funding mechanisms in place do not support schools in fully achieving the sustainable performance set out in the DfES Sustainable Schools Strategy (2006) and the UK Sustainable Development Strategy.

    —  As recommended by the Sustainable Procurement Task Force, the DfES and HM Treasury need to work together to review how schools (rebuilds and refurbishments) can be procured on the basis of whole life value (broadly defined) to maximise the contribution to sustainable development.


4   Sustainable Development Commission, 2006, Schools Carbon Footprinting: Scoping Study. Back

5   BRE, 2006, Review of opportunities for improved carbon savings from spend on education buildings. Back

6   For example the SDC understands that the DfES is planning to bring forward additional devolved capital funding to schools. A proportion of this funding could be reserved to create a revolving fund for sustainability measures. Back

7   DfES, 2006, Sustainable Schools: for pupils, communities and the environment. Back

8   HM Government, 2005, Securing the Future: delivering UK Sustainable Development Strategy. Back

9   New homes standard being developed by DCLG. Back

10   For example the SDC understands that the DfES is planning to bring forward additional devolved capital funding to schools. A proportion of this funding could be reserved specifically to create a revolving fund for sustainability measures. Back


 
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