Examination of Witnesses (Questions 1-49)
TIM BYLES
CBE
27 JULY 2010
Q1 Chair: Good morning, and welcome to
the first witness session of the new Education Committee in this
Parliament. It is my pleasure to welcome you, Tim Byles, to give
evidence to us today about Building Schools for the Future and
the Department's future capital spending. Speaking to you beforehand,
you said that you would like to begin with a short statement.
I am happy for you to start off with that now.
Tim Byles: Thank
you, Chair, for the opportunity to make a short opening statement.
A number of misunderstandings have been circulating, regarding
the handling of the Secretary of State's recent announcement on
Building Schools for the Future, and I thought it would be useful
to set out a few facts at the outset of this session. I would
like to cover two points: first, why there were errors in the
lists published and secondly, whether it was reasonable to expect
Partnerships for Schools to have those data in the first place.
The previous Government's policy to rebuild or renew every state
secondary school was to be delivered through local authorities
on an area-wide basis. Our role was to implement a delivery mechanism
fit for that purpose and to have information systems to support
it, as defined by the Department for Education. As a delivery
agency, we are totally focused on the need for accurate information
and data. In BSF, local authorities are the procuring bodies.
It is through them that the programmes are delivered and the information
collected. We do not, and in fact are explicitly restricted from,
collecting information from individual schools. As a procurement
agency, we are required to capture detailed data only on schools
that are in the procurement process. We hold data on schools that
have not yet reached that stage—in other words, schools
that local authorities would like to join the programme next.
However, that information is fairly fluid, given amalgamations,
closures and name changes through reorganisations, for example.
As a result, when we were asked to provide detailed lists of all
schools, both those in procurement and in pre-procurement, we
advised the Department that it would be wise to validate the information
with each local authority before publication due to the inherent
risk of errors. The advice was not followed, and a number of errors
arose. Partnerships for Schools is entirely responsible for an
error on Sandwell schools. I apologise in full for that, and have
done so in person to the chief executive of Sandwell council and
to the Secretary of State. Further lists were produced by the
Department on 6 July, which again contained errors. The validation
exercise with local authorities was then completed by Partnerships
for Schools and the Department, with the final lists produced
on 12 July. Our systems were designed to deliver the policies
and reflect the priorities and culture of the previous Administration.
The new Administration quite clearly have different requirements.
The review of schools capital currently under way will determine
how best the systems should support the policies of the new Administration.
Thank you for the opportunity to make that short statement. I
am happy to take any questions that you have.
Q2 Chair: Thank you very much for
that, Mr Byles. The Wall Street Journal reports your salary
as being one and a half times that of the Prime Minister. Do you
think that you and the organisation you lead offer value for money?
Tim Byles: I do
think that we offer value for money. My salary is set by the Department.
I responded to an invitation to lead Partnerships for Schools
in 2006, when the programme was running behind schedule. The National
Audit Office reported on our progress in its 2009 report, and
I am sure we will cover some of its comments later in the session.
The facts are that the system, designed for whole area investment
through local education partnerships and the use of frameworks,
delivers value for money in those terms. It is clear that, with
a different set of priorities and a more targeted approach to
school investment, alternatives need to be considered, and that
process is now under way with the schools capital review.
Q3 Chair: Why do you think that
the PricewaterhouseCoopers report into BSF was unable—even
as late as February this year—to provide evidence that it
was offering value for money?
Tim Byles: The PWC report was
looking at longitudinal data over several years and the impact
of the programme, and its latest report this year focused on attitudinal
data mainly from head teachers. It was not asked to provide conclusions
on value for money. The value for money exercise is carried out
regularly by the National Audit Office. We saw it last year, and
we expect to see it again soon.
Q4 Chair: But on page 79 of its
report, it said, "It is too early to make a firm assessment
of the value for money and cost effectiveness of the ... programme."
There was some suggestion that the detailed data were not available
for that assessment to be made. Was there anything to that criticism?
Tim Byles: I do not read it as
a criticism. It is to do with the trajectory of a very large programme
and the time it takes to go through procurement and into operation,
and to measure differences in the performance of schools in terms
of environmental standards, space standards and delivery to cost
and time. The BSF scheme was set up to use both private finance
and grant finance, and we look in detail at what is the best tool
for the job depending on the scale of investment that is being
asked for. It is that to which PricewaterhouseCoopers was referring.
Chair: Thank you very much. I have warmed
you up, and I turn now to Damian to continue the questioning.
Q5 Damian Hinds: I want to go
right back to the inception of the project overall. What did you
regard as your and your organisation's mission? Was it about building
just schools for the future or changing schooling for the future?
Tim Byles: I joined Partnerships
for Schools in November 2006, so it was a couple of years into
its life. It was at a time when the original estimates for delivery
were not going at the pace that the Government had originally
intended. The challenge for me was to sort that out, and that
is what I have done. Partnerships for Schools has met or exceeded
its delivery targets for each of the past three years. Building
Schools for the Future is a very ambitious programme to contribute
towards what was defined as educational transformation. It was
not to be educational transformation, but to provide environments
where bullying is designed out of school design and having spaces
that inspire and engage young people alongside teaching and learning,
school leadership and encouraging the involvement of parents.
All those are major factors that determine education improvement.
Building Schools for the Future is an ingredient in that mix,
but it is not the whole story.
Q6 Damian Hinds: In retrospect,
would you have rather had less emphasis on the phrase about transforming
education and all the expectations that it inevitably raised in
something that was ultimately a capital programme to build new
schools?
Tim Byles: At the risk of sounding
like Sir Humphrey, it is not my job to question that. We are a
delivery agency. The Government set the policy for us, and we
then deliver it—whatever the policy may be. Our responsibility
is to advise on the doability of the priorities. It was clear
to me in November that the programme had started slowly and that
it was possible to sort that out through the delivery mechanisms
that the Government had selected, local education partnerships
and the development of framework procurements. We therefore set
about trying to make sure that what is a complex system is delivered
as quickly and effectively as possible when compared with other
similar approaches across government. Quite a lot of data show
that Building Schools for the Future is best in class at delivering
what are defined as complex procurements.
Q7 Damian Hinds: I realise that
you will say that understandably, for some schools, it is early
days and too early to measure, but would you say that, for schools
that have been part of the BSF programme, education has been transformed
as opposed to schools having been transformed?
Tim Byles: Yes. We have seen quite
a lot of early information. It is right to say that we cannot
test it absolutely at this stage. We have seen leaps forward in
performance in schools. For example, at Bristol Brunel academy,
the first school delivered by local education partnerships, A
to C GCSEs, including English and Maths, went from 17 to 34% in
the first year. The Oxclose Community College refurbishment scheme
in Sunderland went from 19% to just over 60%, including English
and maths, in two years—same school, same teachers, same
pupils, but there was a real impact. Seeing that sustained through
time is one of the key issues in determining the extent to which
Building Schools for the Future is effective as part of the mix
of school improvement. Of course, our target is to start with
the most challenging schools first, so that's how it's been set
up. We have some encouraging signs, but not yet a universal picture
of just what the right mix is. That's why we tried to move away
from the original concept of BSF, which was to have a one-size-fits-all
approach. We tried to tune in to local priorities and local issues
to make sure that the solutions we were coming forward with made
sense to communities and to teachers and parents in schools.
Q8 Damian Hinds: You mentioned
there were different buildings but the same teachers and same
everything else. In retrospect, do you think too much emphasis
was put in that mix on the buildings, while not enough was done
about the people, the leadership and the way things were done
and about bringing the teaching and the senior team with you?
Tim Byles: It depends entirely
on the circumstances. We have tried to stimulate a thought process
about what is really needed in the school. Is it a change of leadership?
Sometimes it is, and that's where the academies or the trust schools
part of the equation comes in. Is it to do with teaching and learning?
Is it to do with particular issues in individual subjects, which
is not our remit, but we encourage the local authorities and the
schools themselves to produce a thing called a strategy for change
at the beginning. What are we actually trying to deal with here?
That is what I mean by moving away from a one-size-fits-all, here's-the-money,
you-get-on-with-it approach. We have tried to say, "Let's
just be clear about what we're trying to do and try to measure
that." That is different in different circumstances, and
I wouldn't want to say that a single approach is right.
Q9 Damian Hinds: Finally, I have
one short question. In terms of the overall programme, how far
out did your CapEx planning go? You mentioned in your opening
remarks that you didn't necessarily see the full database of schools
but that you did know the next tranche of schools that the Department
wanted to come into the programme next. With that in mind, how
did your out-years CapEx planning work? Was it just a cash limit?
If so, how did you think that cash limit might change were there
not a change of government?
Tim Byles: We operate on spending
review periods, so typically on a three-year forward projection.
We agree—without getting too techie about it—the PFI
credits that are associated with PFI schools and the capital grant
that is associated with schools that have capital grant. We are
dealing with quite a long period—or we were at the time—so
assumptions are made about future spending review periods, which
are agreed with the Treasury at the point of announcing the entry
of a local authority into Building Schools for the Future. Those
are pencilled into the Government accounts because the ceiling—typically
£80 million to £100 million per authority for the first
few schools—is what Ministers announced for the entry. We
then look at how long it takes to plan, build and spend, based
on our average procurement times, to provide the assumptions for
the Treasury. Those get agreed, with hard figures by spending
review, and less hard figures for future spending review periods.
Q10 Charlotte Leslie: Thank you
very much for coming along today. Looking at the PricewaterhouseCoopers
report, I am interested in the management implementation, and
specifically the time taken to complete the projects. I am interested
in an apparent discrepancy between what schools and teachers experienced
on the ground and what is reported by PfS. Specifically, about
38% of the schools surveyed felt their new refurbished school
buildings were not on target to be completed in time, as opposed
to PfS findings that about 90% of the projects were completed
on time. I also note that there was a change of targets in 2005.
Could you elaborate on what those changing targets were? Were
the goalposts shifted or were teachers and schools wrong in their
perception that schools would not be completed on time, and PfS
was able to provide better data?
Tim Byles: I'll take the first
question first. It's not a surprise to me at all that head teachers
and teachers thought that the process of delivering the schools
would be quicker than it was. We go through a process, and this
point is similar to the point I was making about pre-procurement
and procurement. Trying to get it right takes some time, and it
took longer with earlier projects than it does now, because we've
tried to front-load the thinking so that people are clear about
what is needed. Head teachers and teachers are, generally speaking,
very good at being head teachers and teachers and less experienced
at procurement and capital works, so it's not unusual for people
to think, "Right, we could have this done in a year"
or something like that, whereas in fact as we go through the pre-procurement
and then the procurement phase we're very clear about what the
time is likely to be in reaching a negotiated settlement with
a provider. That's why the official figures are based on the time
from when an OJEU notice—a notice in the Official Journal
of the European Union—is published to when financial
close is achieved and then construction has got under way, but
there's definitely a perception at the front end that "We
can do this quicker." That's the perception you're seeing
and I'm not surprised by that at all, but the official data are
right in terms of the time and the comparisons that are made with
other similar procurements. On change of targets, what happened
right at the beginning was that Government published an estimate
based on the fastest time it had taken to that point to deliver
a single private finance initiative school and extrapolated that
across 3,500 schools, which was a courageous thing to do at that
time. By 2006-05, indeed—it was realised that delivering
whole groups of schools, getting a whole local authority to establish
its priorities, consult local people and be clear about what order
it wanted to do things in, would take longer to start than had
been anticipated. It was at that point that Government set a series
of annual targets for the closing of deals, signing deals with
contractors—how many per year—and the openings of
schools—how many per year. Those are our key indicators—how
many deals have we done and how many schools have we opened?—and
those are the ones that we have met or exceeded every year for
the last three years.
Q11 Charlotte Leslie: Secondly,
looking at the way the Department and PfS work together, I've
noticed the Public Accounts Committee had the opinion that the
Department and PfS wasted public money on consultants—on
work that perhaps should have been done in-house. They paid £60
million to them. Do you think with hindsight there may have been
a better way to employ public money and is there a way whereby
fewer consultants can be used in the future?
Tim Byles: I'll come back to the
horses for courses point. Let's say you're looking at a whole
area and a very large scheme, and I'll take Birmingham as an illustration.
We are procuring more than £2 billion of capital expenditure,
and it is sensible to make sure that either within the local authority
or to the local authority, there is adequate advice to get a good
value for money result. The average cost of consultants or advisers
for local government in entering into these procurements is running
at about 2.8% of the capital cost. That is a low number in comparison
with other similar types of procurement. It is a substantial figure.
We've looked hard at it. Let's say you're looking at a whole-area
approach and you're dealing with that scale of investment. Many
local authorities don't have in-house any more the professional
advisers that they had in times gone by. They need to have external
advice, as indeed does the Department, in dealing with some of
these complex questions. The Department did engage—the NAO
report referred to this—a particular specialist consultant
to advise it on some aspects of equity funding for joint venture
schemes. That figure was highlighted in the NAO report and the
Department apologised for it. It felt it could have done it better
with hindsight. In Partnerships for Schools, we have directly
people from the private sector working in the company to minimise
the need for consultants. We have lawyers, surveyors and procurement
specialists, but there are occasions when we need to take specialist
advice, particularly as case law develops in European procurement
law that allows us to bring in changes that reduce the overall
cost of the scheme. We've done that twice so far. So if you ask
me whether I'm optimistic that in the future we'll be spending
less, the answer is yes, and year on year we have spent less on
consultants at the centre as the systems have become better embedded.
Q12 Charlotte Leslie: My final
question is on a specific issue. It comes from a school that contacted
me. It indicated that in its rebuild it had very efficient ICT
equipment that didn't fit in with the ICT equipment that was imposed
on it by the local education partnership. It was compelled to
get rid of its perfectly functioning ICT equipment and buy into
the new system, obviously at extra cost to the taxpayer and waste
to the school involved. It was compelled to get rid of its perfectly
functioning ICT equipment and buy into the new system, obviously
at extra cost to the taxpayer and waste to the school involved.
Do you feel that that is a situation that can be avoided, that
local education partnerships were or are too rigid, and is there
a model that would be more flexible?
Tim Byles: It is certainly fair
to say that the earliest BSF projects were quite rigid about the
managed service, but schools could choose—it was not an
imposition. It might have felt like that and I understand your
question about that, but it was not forced upon them to not use
well-performing ICT. They were strongly encouraged to enter into
a managed service and to have the kit, its maintenance and the
services that run on it, which fits the whole-area priority. One
of its values is to make sure that vulnerable children who might
move between schools do not fall through the cracks with individual
ICT systems, and that is one of the objects of this managed service
approach. Since the very earliest schemes, we have looked hard
at managed services. How can we attune them to what is good in
existing schools? How can we give a menu so that the schools can
choose rather than having a one-size-fits-all approach on a managed
service? We generally found in almost all cases that, having gone
through that process, schools are enthusiastic about what they
are getting. There are some that aren't, and they have an alternative
choice. They can put forward an alternative procurement case that
is tested not by PFS but by independent people to see whether
that suits the school better. I come back to the fact that I do
not think that the one-size-fits-all approach is the right answer.
We ought to be looking at an individual case-by-case basis and
working out what is best for the school involved.
Q13 Pat Glass: Good morning, Mr
Byles. I noticed that you mentioned Oxclose school, which I know
very well. It is a fine example of a school with incredibly high
standards and probably the most inclusive school I have ever worked
with, so thank you for that. My question is about bureaucracy
and wastefulness, and it is in two parts. First, I was there at
the beginning of BSF and it did feel quite bureaucratic. Given
the amount of money that was involved, I would be interested in
your view of this dilemma of bureaucracy versus accountability.
Secondly, how much of that bureaucracy was around protecting the
future? Much of the criticism made of schools that were built
in the '50s and '60s was about why universities—and hospitals—which
were built at the same time were in such good nick when schools
were falling apart. My recollection of BSF at that time was that
much of the bureaucracy and some of the funding—lots of
the funding—were built-in maintenance around protecting
the future.
Tim Byles: That is absolutely
right. To take the first point, is there bureaucracy and waste?
Yes, there is. I am on the record several times as saying that
the system under which we must operate for what are called complex
procurements, as defined by the European Commission, means that
there is an inherent waste in the system. What we have to do through
competitive dialogue is produce two schemes all the way through
to fine detail. All matters of risk and price get resolved, and
then the local authority chooses its partner. There is inherent
waste in that process, because you have two designs if you have
two sample schemes, as we do, which have been fully worked out
and are then put in the bin. That cannot be sensible from a man-in-the-street
view. It is absolutely determined by the procurement route that
we must follow on competitive dialogue, as set out by the European
Union. That is why we have been trying to push the boundaries
of that several times in the past three years. We had a procurement
review that reduced the number of sample schemes to two only—one
PFI, one design and build school—so that we minimised abortive
expenditure in the bid process. We very much standardised the
approach—the documentation and so on—to make sure
that people can pass through the procurements as quickly and as
cheaply as possible. In terms of the time on procurement, we are
performing way ahead of any other complex procurement by government
through this standardised process. We are also getting lower prices
because of it, because the risk profile of BSF projects is well
known to the banks. That is why they came back quickly for—we
describe it as a cookie-cutter approach—a standard risk
profile, and that is why we are delivering PFI schools in Building
Schools for the Future at around 100 basis points less than bespoke
PFI procurements on waste projects or on refinancing the M25.
So there is a great benefit in having a programme approach that
aggregates procurement, is clear about risk and can keep costs
down, but there is waste because of the nature of the scheme.
What about protecting the future? It is obvious when you look
around our schools. The NAO—or it might have been the Audit
Commission—report of 2002 identified that 80% of our school
buildings were beyond their design life. That is what started
the thought of Building Schools for the Future. As a nation, we
are hopeless at maintaining our assets without help. Building
Schools for the Future was designed to make sure that if there
were to be a big investment it would be properly maintained, and
that was factored in to the resources made available. In answer
to your question, it was a significant part of what we were doing—not
just making an investment but trying to make sure that is kept
to proper standards into the future.
Q14 Pat Glass: May I go back to
what you said earlier? It is interesting that these things are
in many cases dictated by the EU. I do have some sympathy. I remember
running an education transport service for children with SEN in
the city of Sunderland and having to advertise in Paris, just
in case Pierre in his taxi would like to take children in Sunderland
to school. At the time, that seemed nonsense. You are saying that
much of this was around regulations that were completely beyond
your control, and presumably beyond that of the British Government
as well.
Tim Byles: Yes. This is European
legislation and the way the UK Government respond is to have a
procurement system regulated by the Treasury as to what procedures
you need to go through to do it. We have been able to go faster
because of the throughput of cases, but yes, these are European
rules. We have been able to go faster for academies by having
individual school procurements and using frameworks to do that.
That process is quicker. If you are looking at whole areas, you
have competitive dialogue, but if you are looking at individual
schools, you can use frameworks, which are faster. It is an issue
for this capital review as to what government want to do going
forward.
Q15 Craig Whittaker: Good morning,
Mr Byles. Before I ask my question, I want to follow up quickly
on something that Charlotte asked, when you said that 2.8% of
capital expenditure was on consultants. Will you explain how many
of the specialists on your books are consultants, but are hidden
costs because they are on your books?
Tim Byles: They are not consultants;
they are professionals in their field. We have lawyers, for example,
who help with contract matters. They are employed directly by
us to facilitate the delivery of the procurement documents. We
have 37 lawyers[1]—speaking
from memory, but I will confirm that—whose job is to facilitate
that process. It is not a way of concealing costs; it is the most
effective way to deal with complex procurement. They cannot handle
everything, which is why occasionally you have to take external
advice, but they do help regulate the standard system of contract
documentation.
Q16 Craig Whittaker: So, are you
saying they are not paid at consultant rates?
Tim Byles: No; I am sorry if I
misunderstood. We employ them full-time and pay them a salary
comparable to what they would achieve in other places.
Q17 Craig Whittaker: It was interesting
to hear, when you were talking to Damian, that bullying has been
designed out of school design, but local authorities have been
reported by the Policy Exchange as describing Partnerships for
Schools as bullying in its treatment of local authorities and
being cavalier and controlling. That is my experience as lead
member for children and young people's services in Calderdale,
when we had two schools of very poor fabric that were achieving
above the attainment levels and did not suffer from deprivation.
We lobbied for a long time to get those schools rebuilt under
early release of BSF, to be told that BSF would not fund those
but would fund the relocation of a local faith school, which only
affected 100 pupils, because that helped out another authority.
Will you comment on whether there is any substance to those allegations,
particularly from the Policy Exchange?
Tim Byles: I would be glad to.
I want to make it clear that I have an unshakeable belief in truth
and fairness. PfS is not in the business of bullying local authorities.
We work with local authorities and their private sector partners
to ensure that taxpayers' money is well spent and that new schools
make a real difference to teachers, pupils, parents and communities.
In relation to Policy Exchange's report, a number of organisations
alerted us to their concerns about how their contributions were
being represented. I understand that many of those raised those
same concerns with Policy Exchange. What is unusual about Policy
Exchange's report, compared with the 12 other reports in the public
domain covering the same subject, is that it chose not to include
the evidence from its witnesses, other than to cite anonymous
sources. But let me put on the table some data from independent
sources: independent research carried out by Ipsos MORI in January
2010 found that 79% of local authorities were favourable or very
favourable towards PfS; 84% agreed or strongly agreed that although
BSF had got off to a slow start, it had now accelerated and is
now delivering; and 78% of local authorities believed that Partnerships
for Schools is effective or very effective at delivering the BSF
programme, compared with 98% of private sector respondents. So
in the public domain there is no evidence to support that assertion
in the Policy Exchange report. That is why I refute it now.
Q18 Craig Whittaker: So why do
you think that so many local authorities feel that way? I can
assure you that that is the feeling up in my neck of the woods
and without question has been my experience.
Tim Byles: That is not borne out
by the data gathered independently and in the public domain by
stakeholder researchers. What I think is behind your question,
and it is a good one, is whether the shape of it fitted what you
wanted to achieve in that particular authority at that particular
time. Certainly the Government had a set of priorities that were
not primarily devoted to the condition of the school building
in isolation but looked at deprivation, special needs and producing
a set of priorities, owned and approved by the authority, to be
the priority schemes going forward. There is not instant unanimity
in any community about what the top priority is. I know that.
I was a local authority chief executive for 10 years. You need
a process to discuss and debate and produce priorities locally.
Our job is to facilitate a match between local priorities and
government priorities and BSF was constructed to look at the most
deprived schools first, which is why the kinds of conversations
you described would have happened. It is open to the Government
to have different priorities going forward. It is clear that the
condition of school buildings is more of a priority for the current
Government than it was in isolation for the previous one. There
are always debates in establishing priorities but I absolutely
do not agree with the assertion that we are in the business of
bullying local authorities.
Q19 Craig Whittaker: I just want
to reaffirm to you that local authorities do have a discussion
and produce a legal document which is called the statement of
priorities around capital expenditure, particularly in relation
to high schools. So that is the main point of what I am saying.
In our particular instance what came out of what Partnerships
for Schools was offering were the same criteria that were applied
or we were applying to the other two schools as well. So could
you clarify whether it was perhaps politically led rather than
down to political criteria?
Tim Byles: I absolutely do not
think that it was politically led. The criteria were set publicly
and our job as a delivery agency—a step away from government—is
to implement a set of technical solutions against that specification.
There was never any political interference into that process.
It was deliberately set up to be independent against the published
criteria. Those criteria were to do with deprivation, attainment,
condition and also basic need—how great is the shortage
of places? There is a dialogue between authorities of all political
persuasions and ourselves to try to work out what the best way
forward for individual schools was and is. There was no political
bias to the process we went through as a delivery agency.
Q20 Lisa Nandy: There has been
some confusion over the decision to stop projects that had reached
financial close. How were those cut-off criteria decided and what
was Partnerships for Schools' role in that decision? Did you have
any discussions with the Secretary of State or the Department
about the wider implications for schools of the decision to close,
such as pressure on school places, planned closures of other schools
in the area or the state of the buildings themselves? If so, what
was your advice?
Tim Byles: There were extensive
discussions both directly with the Secretary of State and in the
latter part of the process through officials to comment on. There
were a large number of requests for information—more than
50 separate requests—in the period running up to the announcement.
That is why we advised that it would be better to validate the
data prior to an announcement in order to be sure that it was
entirely accurate. But, yes, we advised on the number of authorities,
schools and pupils that would be affected by different permutations
of the decisions, and we produced a large number of lists against
different criteria before the final one was selected.
Q21 Lisa Nandy: And did you provide
any advice about which criteria you thought would be most fitting
for the Department to adopt?
Tim Byles: Yes, we did. These
things are a dialogue with Ministers, and we worked hard on an
assumption, which was to do with protecting ones that were at
financial close and also those that were at or past the close
of dialogue phase—that was a key part of the discussion
early on—and permutations around that. What is the right
balance between protecting expenditure that has already been significantly
made for an investment in school buildings and the need to save
a considerable amount of money going forward? That is what that
discussion was about.
Q22 Lisa Nandy: Could I throw
back to you that question about the right balance between protecting
projects that have already had significant investment and the
obvious and extreme need in some areas for those buildings?
Tim Byles: At the risk of sounding
like Sir Humphrey again, that is a question for elected politicians;
our job is to advise on the impact of policy options, which we
did. It is not our job to say, "This is what you should do."
We do, and did, advise on the minimum levels of abortive expenditure
that would result from drawing the line at different stages.
Q23 Lisa Nandy: Would you accept
that there is a significant impact because of the decision to
determine the criteria as simply those projects that had significant
financial investment?
Tim Byles: Very definitely; yes,
there is a very significant impact indeed.
Q24 Liz Kendall: Hello, Mr Byles.
I just want to go back to the point about the advice you gave
the Department that it would be wise to validate the list before
publishing it. Did you give that advice directly to the Secretary
of State?
Tim Byles: I gave that advice
through officials.
Q25 Liz Kendall: Through officials.
And were you given any reasons as to why your advice was ignored?
Tim Byles: No.
Q26 Liz Kendall: Did you, at any
time, seek or receive any advice on the legal implications of
cancelling some of the projects?
Tim Byles: Yes.
Q27 Liz Kendall: Did you pass
on that advice to officials and/or Ministers?
Tim Byles: Yes indeed, and the
Department itself has a responsibility to take independent legal
advice on such matters, and it's published, publicly, its position,
which is that—strictly contractually—where there are
contractual obligations on local authorities, they should be honoured,
as they are in this case, at financial close. However, where no
contract has been finalised or signed, or no firm agreement to
build a further wave of schools is already in place, you are in
a different legal position. That is the information that the Department
has published and it has done so publicly.
Q28 Liz Kendall: Do you know of
any local authorities or other bodies that will be pursuing legal
action as a result of the advice?
Tim Byles: I know a great many
people who are thinking about it.
Q29 Liz Kendall: And are they
in local authorities?
Tim Byles: That includes some
local authorities.
Q30 Liz Kendall: You said that
the mistake about Sandwell was your responsibility.
Tim Byles: Yes.
Q31 Liz Kendall: How did you make
that mistake?
Tim Byles: We made the mistake
because we were producing a lot of data over a constrained time
period. We had people working 24 hours a day for seven days a
week for three weeks on the go, and we were doing that against
a range of different possibilities. Larger authorities have their
investments in groups of projects known as waves. Sandwell's wave
3 project is okay, but, on this decision, its wave 5 project,
which was in pre-procurement—not a set of schools' data
that we would hold—was not going to continue. We made a
mistake by coding that as, "It's Sandwell's—oh, it's
continuing." That was our mistake. It was made late at night,
but it was our mistake and I take responsibility for it. It was
a misclassification of a group of schools on the decision as taken
by the Secretary of State.
Q32 Liz Kendall: Whose responsibility
were the other 24 mistakes in the initial list that was published?
Tim Byles: The BBC website talked
about 23. There were 11 mistakes that I think are actually down
to Partnerships for Schools and there were 12 that were not to
do with our data.
Q33 Liz Kendall: So does the Department
for Education have responsibility for those mistakes?
Tim Byles: Primarily, yes. You
have got to understand that when you say mistakes—I will
give you an illustration. What happens in the life of a project
is that you might start with an academy and call it Norfolk One,
for example, and ultimately the name of the academy is something
else. Those are the kinds of mistakes. So these are not major
mistakes with people being told that projects weren't going to
go ahead when they were, or they were going to go ahead when they
weren't. The vast majority of the other ones are to do with academies
that are up for discussion and subject to the current review that
the Department is carrying out. That is the extent of the error.
There were not fundamental problems with the data, but there were
23 errors out of 1,500 schools overall.
Q34 Liz Kendall: Just to finish
off, is the list accurate now?
Tim Byles: Yes.
Liz Kendall: Finally—
Tim Byles: I am not visibly crossing
my fingers when I say that.
Q35 Liz Kendall: Who is taking
the decision about whether the small number of locally prioritised
sample projects are going ahead, and when will that decision be
taken?
Tim Byles: That is a matter for
the Secretary of State and I expect that decision to be taken
before the autumn.
Q36 Conor Burns: Mr Byles, I am
somewhat confused. You have been talking rather eloquently, in
detail, with Labour colleagues about how you were able to produce
a large number of lists on a variety of criteria for the Department.
You were able to differentiate those of financial close or close
of dialogue, I think I quote you in saying, yet you seem very
keen to put all the blame for the errors fully on to the shoulders
of the Secretary of State, which was your starting point this
morning.
Tim Byles: If that is the impression
I have given, that is not what I am trying to say. I said quite
straightforwardly at the beginning that the mistake on the coding
of the Sandwell schools is definitely a PfS problem, and that
is almost half those errors. That was a miscoding of a whole group
of schools and I want to make it absolutely clear that that was
a mistake by PfS and I am responsible for it.
Q37 Conor Burns: I want to clarify
again, because you also said that you have had a large number
of conversations with the Secretary of State since he was appointed.
Tim Byles: Indeed.
Q38 Conor Burns: But you did not
have a face-to-face or a telephone conversation to impart your
advice to him that he should not have proceeded with the publication
of the list?
Tim Byles: That is correct.
Q39 Conor Burns: What is your
feeling towards the Secretary of State?
Tim Byles: He is the Secretary
of State. It is my job to do my very best to serve the Government
of the day. That is what we do. It is a belief I hold passionately,
personally. I am not a policy person, I am a delivery person.
So my job is to respond to the policy environment I am in and
to give my best advice in that context.
Q40 Conor Burns: What was the
size of the financial bonus that you were expecting this year?
Tim Byles: I do not expect bonuses.
Q41 Conor Burns: The Secretary
of State cancelled the bonus you were expecting.
Tim Byles: In common with many
public servants in a time of considerable financial challenge,
many senior public servants have not been awarded bonuses this
year. Ministers themselves have taken a cut in salaries. I am
entirely happy, in today's climate—despite the fact that
we hit 100% of our delivery targets last year—not to be
awarded a bonus this year.
Q42 Conor Burns: Looking back
over all your time, do you not think that the taxpayer will conclude
that, when we spent £250 million without a piece of soil
being turned, it would have been much better just to give this
money directly to schools and local authorities, and that your
agency has actually consumed a large amount of taxpayers' money
to no real purpose whatsoever?
Tim Byles: That conclusion is
a matter for individual taxpayers and I would not want to speculate
on that other than to bring to your attention the independent
analysis that has been carried out in relation to the value for
money, through aggregated procurement—the principle which
government hold across the piece and which this current Administration
are also prioritising. If you are doing a whole-area approach,
you need to have the right tool for the job. If you want to target
individual schools across areas, as is the emerging priority of
this Administration, a different approach may well be appropriate.
The use of frameworks, as we have done very successfully in reducing
the cost of individual academy procurements by up to 30%, could
be applied much more widely, including in the PFI area. These
are all matters at which the capital review is looking at the
moment. But if you want to make very substantial investment, you
need to make sure you are doing so on a sound basis. That is why
I defend the level of investment that was made in establishing
the local education partnerships and in making sure that local
authorities had the right advice to make the best decision in
the interests of local people.
Q43 Chair: Mr Byles, The Sunday
Telegraph reported an insider as saying: "Michael was
warned in strong terms not to go ahead with what he was planning
to do—but he wouldn't be told. The list, with all its errors,
was rushed out and we have all seen the consequences of that."
Were you that insider?
Tim Byles: No.
Q44 Chair: Did you authorise that
insider?
Tim Byles: I did not.
Q45 Ian Mearns: Good morning,
Mr Byles. In a previous answer, you said that you thought that
a number of organisations were anticipating or preparing a potential
legal challenge. From your understanding of the situation, do
you think that any of those legal challenges would be successful?
Tim Byles: That is not something
I can comment on. It is a matter for authorities or contractors—it
is just not something I can give advice on.
Ian Mearns: You have 37 lawyers.
Tim Byles: Yes, indeed.[2]
I am reminded of the story that, if you have five economists,
you tend to have seven or eight different opinions. The same is
true of lawyers in my experience.
Q46 Ian Mearns: Secondly—this
is a crucial question from my perspective—are the schools
whose projects have reached financial close going ahead?
Tim Byles: Yes.
Q47 Ian Mearns: And some schools
will not be stopped because significant work has been conducted.
Are there any judgment calls on what is regarded as significant
work?
Tim Byles: Clearly, there is no
single place you can draw the line. The problem we face is looking
at the level of forward commitment for government on capital and
what choices are available to Ministers in reducing that forward
commitment. That produces a risk profile in terms of the balance
of investment to loss of work, which is directly proportional
to the stage in the process that you are at. If you have signed
a contract, that is a pretty difficult thing to undo. If you have
closed dialogue and chosen your preferred bidder, that is also
pretty significant, but it is possible to stop. If you have only
just started to think about it and you haven't even published
a notice in the Official Journal of the European Union,
not very much expenditure has occurred. We looked at all those
options and gave Ministers options to consider on that basis.
Of course, there are elements of risk in many of those choices.
Q48 Nic Dakin: It has been said,
Mr Byles, that BSF schools have cost three times as much as creating
buildings in the commercial world. Do you agree with that statement?
Tim Byles: No, I do not. There
is quite a lot of comparative information on the cost of school
buildings in this country compared with alternatives. We have
looked, for example, at the cost of offices compared with school
buildings.[3]
It is actually quite difficult to get like-for-like comparisons.
In fact, we have produced the Bristol Cathedral Choir School,
which, in addition to being a school, is an office-block extension.
We look quite hard at the choices available, but, given that we
are dealing with ranges of numbers, we find comparability between
the cost of school buildings and of offices. There is a question,
however, about the health and safety standards that need to apply
to schools and the care of young people compared with offices
with fewer numbers of big people. My illustration relates to fire
escapes: in schools, you have large numbers of small people, so
you need wider staircases than in an office, so you have to get
the specification right. Last autumn, the Department asked us
to take responsibility for the design criteria—that came
to us last October. There were 88 pieces of guidance at that time
for school buildings, which seemed to me to be too many. We worked
through an initial process to rationalise that down to about 40,
and we are working to get a framework of three elements that people
need to take into account. That is the review that we are doing
at the moment. I think that, simply through time, there was quite
a lot of guidance for school buildings. It was not enforced, as
is sometimes represented in discussions about cycle racks, for
example, but it was official guidance from the Department. I think
that can be greatly simplified and we are working to do that with
the Department and the Secretary of State right now.
Q49 Chair: You have just directly
contradicted the Secretary of State's statement to the House on
the costs. Are we to assume that you're nearing the end of your
period with Partnerships for Schools? Is this a farewell appearance,
or is it routinely to be expected that the Secretary of State
will be contradicted by you?
Tim Byles: I'm in the business
of facts. I publish information to you today that is in the public
domain and I set it out straightforwardly. I reiterate my earlier
point that I am very committed to truth and fairness, and I regard
it as my duty to account for the actions of Partnerships for Schools
and the data that we hold.
Chair: Thank you very much. We expect
and hope that our witnesses will be straightforward with us and
tell us the truth as they see it. Thank you for giving evidence
to us today.
1 Witness correction: There are 13.7 FTE lawyers
working in-house at Partnerships for Schools. Back
2
Witness correction: See footnote to Q14 regarding number
of FTE lawyers working in-house at Partnerships for Schools. Back
3
Note by witness: Building Cost Information Service (BCIS)
cost averages per square metre are as follows:
New Build: £1,25
Retail warehouse: £500-£600
Offices: £1,095-£1,170 Back
| 
