Building Schools for the Future: The Future of Capital Spending

CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 394-i

HOUSE OF COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

EDUCATION COMMITTTEE

BUILDING SCHOOLS FOR THE FUTURE AND FUTURE CAPITAL SPENDING

TUESDAY 27 JULY 2010

TIM BYLES

ED BALLS

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in private and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Education Committee

on Tuesday 27 July 2010

Members present:

Mr Graham Stuart (Chair)

Conor Burns

Nic Dakin

Pat Glass

Damian Hinds

Liz Kendall

Charlotte Leslie

Ian Mearns

Tessa Munt

Lisa Nandy

Craig Whittaker

Examination of Witness

Witness: Tim Byles CBE, Chief Executive, Partnerships for Schools, gave evidence.

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.

Q1 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.

Q2 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.

Q3 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.

Q4 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.

Q5 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.

Q6 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.

Q7 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.

Q8 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.

Q9 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 2006-2005, 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.

Q10 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.

Q11 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.

Q12 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.

Q13 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.

Q14 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 lawyers1-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.

Q15 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.

Q16 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.

Q17 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.

Q18 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.

Q19 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.

Q20 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.

Q21 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.

Q22 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.

Q23 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.

Q24 Liz Kendall: Through officials. And were you given any reasons as to why your advice was ignored?

Tim Byles: No.

Q25 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.

Q26 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.

Q27 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.

Q28 Liz Kendall: And are they in local authorities?

Tim Byles: That includes some local authorities.

Q29 Liz Kendall: You said that the mistake about Sandwell was your responsibility.

Tim Byles: Yes.

Q30 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.

Q31 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.

Q32 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.

Q33 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.

Q34 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.

Q35 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.

Q36 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.

Q37 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.

Q38 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.

Q39 Conor Burns: What was the size of the financial bonus that you were expecting this year?

Tim Byles: I do not expect bonuses.

Q40 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.

Q41 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.

Q42 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.

Q43 Chair: Did you authorise that insider?

Tim Byles: I did not.

Q44 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.

Q45 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.

Q46 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.

Q47 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.

Q48 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.

Examination of Witness

Witness: The Rt Hon Ed Balls MP, former Secretary of State for Children, Schools and Families, gave evidence.

Q49 Chair: Welcome to the Committee, shadow Secretary of State-I almost said Secretary of State. Thank you very much for agreeing to come to give evidence to us today. Can you tell us what educational transformation is?

Ed Balls: Let me start, Mr Chairman, by congratulating you on your appointment. As you said, it’s just like the old days for you and me, but we have around the table a new Committee, which has a hugely important job of scrutiny in the coming period. Unlike Mr Byles, I will not make an opening statement-

Chair: Certainly not without my permission, that’s for sure.

Ed Balls: Of course not. But I would like, at the beginning, to congratulate you, Mr Chairman, and the Committee. For three weeks, I have been asking in the House, through points of order and written questions, whether the Secretary of State was advised not to go ahead with the publication of the list before validation and whether there was legal advice of the risk of legal challenge. I’ve had absolutely no answer at all to any of those questions for three weeks, but in your first Committee hearing, you managed to get an answer from Mr Byles, so congratulations, and I look forward to your future deliberations. It seems as though you will do better than me at getting to the truth on these matters.

Educational transformation-this is, or was, a once-in-a-generation chance to completely overhaul and transform the educational infrastructure of a whole community. That was about not just individual schools, but where schools were, how they were equipped to work together, whether provision for children with special needs and special schools was in the right place and linked to mainstream provision, whether vocational learning and the facilities for it were available, and whether schools shared facilities. It was a genuinely once-in-a-generation opportunity, so it’s obviously of great concern to me and many other people that that opportunity for area-wide transformation has been taken away.

Q50 Chair: So you’re sticking with the transformation? The first people who have looked into it have said no one had a proper definition of educational transformation, and in so far as it is possible to come up with one, there’s no sign at all from PricewaterhouseCoopers’ repeated reports on it that there any educational transformation was being delivered.

Ed Balls: To be honest, Mr Chairman, in the real world, people are seeing-were seeing-the reality of educational transformation in their communities. That was around new schools being built, but also schools working together. I took the opportunity a week and a half ago to visit Sandwell to talk to a group of head teachers and to hear their views. Their view was that this was a once-in-a-generation chance to lift their aspirations of 11,900 children.

Let me give two examples. One was a special school being built on the site of another school in the community, so that you could have both a link to mainstream provision and special educational provision for children with severe learning or physical disabilities. Secondly, there were two schools, one of which was a national challenge school and the other a school that was doing better, and a decision was made as part of BSF to bring the two schools together into a merged new school. The school merger has occurred; the new building has been cancelled. The school now has to try to operate on two sites for the future. In that case, the chance to transform the educational chances of the children in the underperforming school is, in the words of the head teachers, very substantially undermined. They said: "We have been cut off at the knees." So that is educational transformation being taken away.

Q51 Chair: The halving of governmental capital expenditure will have implications in places, but the key point is that, according to PWC, "BSF does not appear to be positively impacting the behaviours…that contribute to improvements in GCSE attainment…Our research has shown that new buildings alone are insufficient to change pupils’ attitudes and behaviour". Fundamentally, renewing the capital estate of our schools, which everyone agrees is run down, is a positive and decent thing, but suggesting that educational transformation was going to be delivered has no evidential base, and history since, along with the reports that you commissioned, suggests that it has not been delivered. Isn’t that a fair point?

Ed Balls: In my opinion, no, if I’m honest. In 2000, only 15% of our school buildings had been built in the previous 25 years. It took us until 2004 to deal with the basic repairs and maintenance, and the leaking roofs. The next stage was to ask, "Do we have the schools where we need them, and also the ability for schools to work together and deliver the broader curriculum offer for children with special needs, and also for children with an interest in vocational learning to link up to further education provision?" I do not read the PricewaterhouseCoopers report as saying that the evidence was that there wasn’t educational transformation, but the truth is that it takes time for educational transformation to be delivered on the ground.

The question is, do you aim as an objective of a programme to deliver that educational transformation-that boost to aspiration-or do you not? We were doing that, and the abolition of this programme means that- Well, to be fair to the new coalition, it is trying to achieve educational transformation through a different means, not through collaboration and investment but through the operation of competitive market forces, and I think that that is very foolish.

Q52 Chair: It would say, I suppose, that it was doing it through teaching rather than through buildings. May I ask one other question before I open this up?

Ed Balls: It is like the old days, Mr Chairperson, when you made points and then moved on to the next question. But on the point that you made, which is almost a question but not quite-

Chair: I only said what was said.

Ed Balls: Yes, but let me reply to that. There is no doubt in my mind that the most important thing that delivers educational transformation is teaching in the classroom. Of course that is the case. You can have a great building and poor teaching. Of course that is the case. The most important thing that delivers great teaching, in my view, is great leadership in a school: the head teacher and the leadership team. I have no doubt that that is the case. But it is also the case, as I have said many times in the past few weeks, that it is very hard for a great leader first of all to attract great teachers into a school, but also to boost the aspirations of children, if they are doing so in third-class facilities. There is also no doubt that parents’ views of whether their children will do well and whether their aspirations will be boosted are in part determined by whether they have their breaks-at lunchtime, in the morning and in the afternoon-on the basis of a regular school timetable, or whether it depends upon whether rain gets into the fire alarm and forces an unexpected break in teaching in the morning or the afternoon. I am afraid that that is all about the buildings.

Q53 Chair: Thank you, Mr Balls. One last question from me: was the decision to prioritise deprivation rather than dilapidation in BSF driven by a political imperative to build new schools in Labour areas rather than where the schools were most needed?

Ed Balls: I wasn’t in the Department at the time, but I don’t think so. Lord Knight was the Minister who was responsible for bringing in Mr Byles and for really getting the Building Schools for the Future programme moving, and if you read the speech that he made a week or so ago on this very subject, one of the things that he said was that early on a decision was made to go for the areas where the deprivation was greatest, which were often areas where the schools were in a poor state. But the problem was that in those areas local authorities probably were even further behind in having the capacity to deliver a programme of this scale, partly because of the wider challenges they faced. It would have been better, in his view, to move with a combination of the most deprived inner-city areas and some areas where schools were more sparsely populated, where there were a smaller number of schools that really needed that kind of transformation.

That was a judgment. In retrospect, I think that that judgment was wrong, but to suggest it was politically motivated-to be honest, I don’t think that’s how government works on these kinds of programmes. As the Secretary of State will now find out, if you proceed in government by making decisions that you announce in a chaotic way without proper criteria for those decisions, you find that you have a hard time in front of select committees and you get hauled through the courts. The right thing to do is to have clear criteria, on the basis of which you operate. Our decision was we would start with the areas of greatest need. That was a very clear criterion. You can-

Chair: Deprivation, not need.

Ed Balls: I probably think deprivation is quite an important sign of need, but-

Chair: Not if the building is sound. There is no need if the building is sound, however poor the neighbourhood. That is the critique.

Ed Balls: As I said, in 2000 only 15% of our schools had had a new building in the last 25 years, so I’m afraid that the need for new buildings was fairly widespread.

Chair: May I cut you off, shadow Secretary of State, and bring in Tessa?

Q54 Tessa Munt: How exactly do you feel that need or deprivation-the one-size-fits-all programme-works in rural communities? I represent a seat in rural Somerset where there isn’t a lot of choice because there are 12 or 15 miles between schools, and some of those schools had been in pretty poor condition. We also operate a middle school system, so it doesn’t always fit the secondary criteria. How did you feel about what I perceive as the fairly bullying-we return to the theme of the session involving the previous witness-attitude of Government know best and one size fits all?

Ed Balls: If the question is whether it was right to go local authority by local authority through this programme, I think the answer is yes, because that was the only way to achieve educational transformation, rather than simply individual schools being replaced. Am I concerned about the impact of the cancellation of these schools and, obviously, wave 7 onwards on rural communities? The answer is hugely, because the fact is that the schools that are most affected-these 700 schools-are not the schools with the greatest concentration of deprivation as measured by free school meals. They are schools that cover a very wide range of urban and rural, deprived and less deprived areas.

In my experience doing the job, when you went to schools in inner-city areas or in rural areas, there were schools that would say, "Look, this building isn’t really fit for purpose and we’re a bit frustrated, but we know that there’s a process and we know what our position is. It’s a bit frustrating waiting two or three years, but at least we know it’s coming." It is those schools-I think many of them are in rural areas-that will be in the list of 720 schools that have suddenly had that hope taken away, so I’m really worried about it.

Q55 Tessa Munt: Let me move on slightly. There was a problem whereby you were not listening to local schools, wasn’t there? For example, the application of BSF meant that you perhaps had a local authority that was a client but that didn’t have any say in anything effectively, and very little communication was possible between architects and designers of schools and those people who actually operated within them.

Ed Balls: That is not my experience both as Secretary of State, when my engagement in the detail of BSF was at a high level, and as a constituency MP. I’m a constituency MP in one of the areas where schools have been cancelled that had spent two years preparing and went into the programme in wave 7 last autumn. I would say there was a very great deal of across-the-community discussion about where the priorities were, the way in which new buildings could encourage collaboration and the importance of making sure that the procurement worked well. To be honest, there was some frustration that the local authority took time to gear up to really be able to deliver this transformation, but there was also a lot of buy-in, not just from the five schools that were in the first wave of our bid, but from the latter schools, which knew there was a purpose and a rationale for that. What you describe isn’t my experience at all.

Q56 Tessa Munt: But as a political animal, you must have been able to foresee-or somebody should have been able to tell you and your predecessors-that it was completely bonkers to put together and run through a time scale that took no account of local factors. I take those factors as being very political. For example, in one situation, there was a school that had a particular programmed date for opening, but the whole programme was put back by a year purely because no one in the Government had recognised that the planners don’t sit for three months during local elections, nor do people sit through the summer-you couldn’t get a planning committee together. If there had been more collaboration with local people, someone would have told you or the people who advise you in your Department.

Ed Balls: We have to have an honest conversation about this. We have to talk about the way in which the programme evolved. In his statement abolishing the programme, the Secretary of State referred to the nine phases of BSF. Those nine phases were reduced to five phases two or three years ago. I agree that having nine phases was a mistake, but you can’t say that what was the case years ago and was changed is a reason for abolishing the programme now.

I think the reality was that there was a real lack of capacity in central and local government to manage the scale of this kind of transformation, as it hadn’t been done for decades. That is not a party political point. It may well be that the previous Conservative Government built no schools, but I don’t think there were many secondary schools built by the Labour Government between 1974 and 1979 either, so it is not a party political point. However, it took time to get the system in place. The reality was, as you can see very clearly from the NAO and the PWC reports, that in the early phase, there was absurd optimism about how long the process would take.

Tessa Munt: But also a lack of decent advice.

Ed Balls: I agree.

Q57 Tessa Munt: That is when you get something put aside because of someone complaining about their right to light over a building project. This is ludicrous.

Ed Balls: Yes, but that is not a good reason to cancel 720 schools.

Tessa Munt: No, it isn’t. What I am saying to you is-

Ed Balls: If you read these reports, you can see that the points you make are absolutely right about the early phase of the programme. It was also the case that as the programme went on, there were some areas that did better and others that did worse. For example, Stoke is the bane of my life and that of both Schools Ministers, who totally mishandled the consultation and never built a consensus about educational transformation. We could have said, "Let’s scrap the whole programme and have a lottery to see who gets their schools first," but that would have been an absurd thing to do because Stoke needed more time to get to a set of outcomes that could command consensus and transform educational life chances for the next 50 years. There were times when the lack of capacity meant that you needed to take more, not less, time.

Q58 Charlotte Leslie: This question asks for a yes or no answer, if you are able to. Do you accept and understand that the plans to get rid of BSF are not plans to get rid of capital spending? It is a case of getting rid of a mechanism for capital spend, not getting rid of capital spending on schools altogether. Is that something you accept and understand?

Ed Balls: Yes.

Charlotte Leslie: Brilliant.

Ed Balls: The thing is that unlike the current Secretary of State, I am quite happy to answer these questions. I can do yes or no. Of course the answer to that question is yes.

Charlotte Leslie: Oh, that is fantastic. Thank you very much.

Ed Balls: We don’t know at the moment what the capital programme is going to be in the next spending review. The decision that I had made, with the agreement of the Treasury, was that within that programme, we would prioritise Building Schools for the Future.

The current Secretary of State has decided to cancel BSF and instead, through the veneer of the capital review, shift the capital programming from educational transformation across an area to what will be a much more random process, plus prioritising new school places through the new free market schools. So there will be new schools built, but my fear is that they will happen in a way that bears no relationship to need, to rurality and to where old buildings are. That is what I am very worried about: the lack of any criteria to guarantee fairness and social cohesion.

Q59 Charlotte Leslie: If I may, you bring me on to my second question. Do you also accept that the previous Government would have made 50% cuts too, and that you had not been able to guarantee the safeguarding of capital spend on schools previously?

Ed Balls: No. I can do noes as well as yeses. The fact is that we had not set a capital envelope for the spending review. That depended on what happened in terms of outcomes in the economy. Although there were big global, aggregate numbers, we had not got a spending review; borrowing had come in lower. Secondly, I think it is madness to stop hundreds of thousands of construction jobs at the present time. I would have argued that case very strongly.

Thirdly, in a letter to me of 28 June 2009, the Chief Secretary confirmed that we would be going ahead with six further BSF go-aheads, which in the next spending review would have a commitment of £7.6 billion. I went into the Department yesterday to make sure that I was clear on my facts. He wrote to me on 7 January of this year, when he said, "We will, of course, need to make clear in any public announcement on Building Schools for the Future that this needs to sit within the overall capital envelope and that we have decided to prioritise the BSF programme over others in the DCSF’s budget."

Chair: In the DCSF budget, not in the overall Governmental envelope.

Ed Balls: No. In the DCSF budget. Therefore, within the overall capital budget, which had not yet been allocated, I had agreed with the Treasury to prioritise the BSF go-aheads for the next spending review, which added up to billions of pounds.

Q60 Charlotte Leslie: So, the grounds and the basis of your concern and objections to this are as yet unsubstantiated suspicions that the money may not go on to exactly the same template as BSF money went on to. Is that the case?

Ed Balls: That was rather an open question to me because I could range wide on that one. I will try to be disciplined, Chair, because I know you will not want me to do so.

These are my objections. First, the decision was made in a totally chaotic way, with 50 different separate requests for information, lists here and there, very last-minute decisions made on sample schools, and legal advice. So, first: chaos. Secondly, the expectations of 700,000-plus children were dashed at the last minute, after millions and millions of pounds had been spent. Thirdly, hundreds and thousands of construction jobs are put at risk now. Fourthly, it is to be replaced by a programme that as yet is undefined, but-on the basis of the terms of the capital review when this finally concludes months away and with a budget undefined but likely to be considerably lower-will lead to capital being diverted to funding free market schools, which in my view will lead to greater social injustice and division. Those are my four objections. To be honest, I could have done another three or four, but I will be disciplined, Mr Stuart.

Chair: Thank you.

Q61 Damian Hinds: Mr Balls, you mentioned that you were fully confident that the Building Schools for the Future budget would be protected within, or in preference to, other elements of the DCSF budget for capital. What did you expect to happen to the overall DCSF capital budget, and which other things were to be sacrificed to keep room for BSF?

Ed Balls: It is important to understand the context. In 1997, the DCSF capital budget was about £800 million. As of now, it is about £8 billion a year. It is a huge budget. I did not know what the trajectory was going to be for the capital budget for DCSF. Even if it were 50% lower, it would still be £4 billion a year. Personally, I do not think that cutting the schools capital budget is a sensible thing to do at the moment, for reasons I have explained.

We are talking about a budget that is billions and billions of pounds. The commitments for BSF in the next spending review were: £2.5 billion for 2011–12; £2.3 billion for 2012–13; and £1.6 billion for 2013–14. The new announcements I made in the autumn added up to a further commitment across the three years of around £500 million. My judgment was that, first, educational transformation through secondary education, including special schools and vocational learning, was an important priority for us. That was within an overall budget that had seen the building of 3,500 Sure Start children’s centres-that was done-and where we had made substantial progress in primary capital. Secondly, within that overall budget, which was a number of billions of pounds, we could absorb the BSF commitments and have billions of pounds left for other priorities. That was a judgment that I felt sound in making. This was doubted by the Secretary of State-it was confirmed by the permanent secretary in a letter to me-but as I look back, it is clear in the letters between myself and the then Chief Secretary that it was a judgment that was signed up to and agreed to by both my accounting officer and the Treasury. If it had not been, it would not have been possible to proceed.

Q62 Damian Hinds: May I go back to that question? Mr Balls, you are both financially astute and very close to the then former Chancellor and then current Prime Minister.

Ed Balls: Mr Cameron?

Damian Hinds: The then Prime Minister. What did you expect to happen to the DCSF capital expenditure budget, given that-in your own words-the commitment that you believed you had secured was for the BSF budget to be protected relative to other elements of the DCSF budget? Given your job at the time, which other parts of the DCSF capital budget would have been sacrificed?

Ed Balls: Well, I don’t think that any part of the DCSF budget would have been sacrificed, because we are talking about a capital budget, where billions of pounds of extra capital are spent every year. The big capital expenditures from the old Department-covering nought to 19-were Sure Start children’s centres, primary schools and secondary schools, with a budget of about £8 billion. The BSF commitment is less than a quarter of that every year.

My judgment is that about 3,600 to 3,700 Sure Start children’s centres have been built. The amount of money committed to the next spending review is largely because of the waves before the wave 7 announcements made in the past year. This is the throughput of the previous waves-the ones which have now been cancelled. My judgment was that we could move forward on primary capital, and that we could afford BSF within any foreseeable budget that was set in the spending review. As you know from the pre-Budget report, I managed to secure rising real-terms current spending for the Department, and I was confident that I would get a good settlement for capital as well.

Q63 Chair: You have been very forthright with us, but you were asked a straight question. If there was a halving of the capital budget and BSF was protected, spending that would have gone elsewhere would not have done so. The question asked where would have felt the strain if BSF was protected within a reduced budget-was it primary schools? You did not give us a clear idea of what would have been hit, because something would have been, compared with what would have happened if the money hadn’t been halved due to the current financial situation.

Ed Balls: I was asked about the premise to the question, which was whether I accepted that the DCSF capital budget would be cut. I said that in politics you have to judge things on outcomes. I had secured a rising current budget for education, and I didn’t know what the capital budget was going to be.

Q64 Chair: You said it could be halved in line with the rest of Government capital expenditure and, in that context, you were asked what would be hit.

Ed Balls: For the absolute avoidance of doubt, I never said that it would be halved; I said that I believed it was better to maintain our capital budget. The only point that I made, which was purely factual, was that even if it were halved, it would still be £4 billion a year, which is twice the BSF commitment. However, it was not going to be halved-I would have made the case for maintaining the capital budget for the Department. My point is that within a multi-billion pound budget there was space for primary capital improvement and for BSF. In my judgment, the Secretary of State’s decision to cancel BSF has not been made because he has to give the money back to the Treasury; it is to divert that money to other priorities, which concerns me.

Q65 Damian Hinds: Of course, Mr Balls, you would have made the case for your Department, but presumably your colleagues in the Cabinet would have done so as well. Are you saying that you would just have won them over, because they wouldn’t have made a very good case? I must say that, in general, it sounds like you have changed your definition of cuts. In the past, when you have talked about cuts, you have meant cutting back on projected future expenditure, whereas today you have said you are not talking about cutting capital, because capital is new money that comes in, in the future. In your terminology, if it was something that would otherwise have been done, it’s a cut.

You talked about the age profile of the school buildings in this country, and I don’t think that anyone here would dispute that you need to have a rolling capital programme for renewal, refreshment and, in some cases, rebuild, and you’re to be congratulated on recognising the bipartisan nature of that. You have also talked about a number of other things-leadership, quality of teaching, schools working together and so on-all of which may have some link with the capital programme, but all of which can all be done without it as well. In retrospect, do you regret conflating two quite different things-first, the capital renewal programme for school infrastructure and, secondly, all those other things that affect the ways of teaching, for which, frankly, it would be a big missed opportunity in the short and medium terms if we had to wait for an entire capital cycle to get those done?

Ed Balls: I will try to decouple all the different questions and points there. First, the spending review would have been based on a spending envelope that has not been set. Based on current spending, I secured rising spending for the children and schools budget in the pre-Budget report. Capital had not been decided, but I would have strongly made the case, as was consistently made by our Government over the past 13 years, that educational transformation is the first priority. I think that that would have continued to be the case, and I hope that it will be in the future.

Secondly, BSF commitments of £2.5 billion a year would be unaffordable in a world of an £800 million capital budget, but the budget was not £800 million-it was £8 billion. I did not know what was going to happen to the capital budget, but I was confident that BSF commitments could be afforded while we continued to invest in primary capital, so I was not concerned about that. In the end, it was a judgment about how to strike a balance, as Mr Byles has said, but I think that we made the right judgment.

Thirdly, can educational transformation happen in an old building? The answer is that it will have to now for many children and in many schools. Of course, the answer is that it can, although there is no doubt in my mind that it is harder. I said this on Third Reading last night, so I apologise if you were there, but when I opened a BSF building in Knowsley, a deprived part of Liverpool, last year-I also had a similar experience in Sandwell-I met the school council and asked two year 9 pupils what the new school meant for them, and they said, "We never thought that anybody would ever think people like us were worth a place like this." If we have such an injection of expectation and aspiration through new buildings alongside great teaching, that is a very powerful combination. If we do not have great teaching, the building cannot do the job, but many heads say that attempting great teaching in a low-aspiration community in old buildings is very hard. That is why many times in the academies programme the new head teacher, the sponsor and the new uniform were combined with a new building, because that is also part of the combination. I am worried by the taking away of that combination through the cancellation of all those schools.

Q66 Ian Mearns: Although I have really enjoyed the speculative questioning of the former Secretary of State about what might have happened had the Labour Government been returned, I want to get back to what has actually happened to BSF. In hindsight, would you say that the model that was established-using Partnerships for Schools as a delivery mechanism-has been an absolute success? Secondly, do you think that, over the years, the Department has ceded too much power and control over BSF to Partnerships for Schools?

Ed Balls: I will use an analogy, if I may. I think that in the cases of child protection and child well-being, the Every Child Matters framework, which was established in 2004, was a real step forward, not just for the protection of children, but for the enhancement of their well-being. Every Child Matters was led by the Department through legislation, but whether it succeeds depends on the quality of the leadership in 150 local authorities across the country. It is brilliantly led in the majority of local authorities, but there are a certain number of authorities-in my time, I have seen Haringey, Birmingham and Calderdale-where the leadership has not been adequate and, therefore, things have gone backwards. It is not possible to legislate for that from the centre, which is why powers of intervention are needed.

Similarly, Partnerships for Schools did a really good job of leading BSF, especially over the past three years. I made the decision not to pay Mr Byles a bonus. Let me rephrase that-the permanent secretary came to me in the autumn to advise me that he thought that was the right basis upon which we should proceed, and I agreed. I think he did a fabulous job in the past three years, but whether or not you actually have effective buy-in from the schools through the LEP for transformation depends on the quality of the leadership in local communities, rather than at the centre. Where things went wrong-I am not going to deny that there weren’t some head teachers who had a very frustrating time, and that there weren’t some local authorities who did not do a very good job in leading this-I don’t think you can blame it entirely upon the centre, just as you can’t blame the centre when you have failures of child protection as happened in Haringey.

Q67 Ian Mearns: Do you think, looking back as well, that there has been any blurring in the distinction in who, between Partnerships for Schools and the Department, has been responsible for what in rolling out the programme?

Ed Balls: In my judgment, no. That’s because I personally believe in this way of doing government. I think it is the job of Ministers to set priorities, to balance between different priorities, to allocate the resources to those priorities and to be clear about the objectives. It is a good model-a bit more at arm’s length from the Minister in the Department-to have an agency with expertise, which delivers that programme on the ground. That is what we have done, I think successfully, with Partnerships for Schools. It does not always work, and Mr Stuart and I have discussed some of the times in the last few years when some agencies have not done as good a job as they should in managing contracts. It does not always work, but personally I think that it is a good model. You have to look at the performance of PfS in the past three years and say that it was very successful.

Q68 Ian Mearns: In hindsight, some of the on-site projects within particular local authorities have necessarily been very big. Because they have been big-covering many schools-they have been rather elongated. Do you think that could have been managed any better?

Ed Balls: I am sure that there are examples where it could be managed better. I certainly said that early on, there was an optimism about time, which was misplaced. But, it is important to put the counter-argument, and this is true whether you are building hospitals, schools or other big public buildings. It is very easy to say, "Why do we have all this bureaucracy? Just give the money to the head teacher and let them build." But the reality is that most head teachers will manage a project like this once, maybe twice, in their career. Their expertise is in leading a school, not in managing a complex multi-million pound procurement against private sector contractors and subcontractors who do this for a living all the time and who are quite good at gaming against a naive client. Therefore, all our experience, whether in the health service or in education, is that collaboration in procurement makes the public sector a better client and delivers value for money, as the NAO report makes clear. It is a better way to do things, but it requires a degree of strategic coming together among the different elements of the client, the different schools and the local authority, which is not an easy thing to do.

As Secretary of State, I repeatedly had to agree, on accounting officer advice, to the overruns on considerably more expensive academies buildings, which were procured in the early phase of the academies project. This would be a good thing for the Committee to look into. They were single procurements with an expensive architect, who had a big design, but it was not actually realised that they would end up costing billions and billions of pounds more. Every time I signed one of those, I would say, "Why do I keep having to agree to these overruns?" And they would say, "Because we are still dealing with the legacy of those academy buildings procured before we had a more sensible approach, through PfS and Building Schools for the Future, to school building procurement." To hark back to a day where you do single building procurement in the public sector is very naive, I think.

Chair: Nic?

Nic Dakin: My questions have been answered.

Q69 Tessa Munt: That goes back to the point that I was making. Contractors don’t teach and they don’t manage teachers. I accept your point that contractors build buildings, but the fact is that there was less locking-in of the opinion of people who specialise in delivering for children-there has to be some way of doing that. Governors have no ability to lock into the process, but they are fully personally responsible-legally and financially-for any mess-up that the school makes by interjecting into the process. Yet the school must interject when it sees the contractors doing something that is comprehensively not going to work.

Ed Balls: I 100% agree. The thing about doing the job that I used to do is that you visit old and new schools, and you meet lots of head teachers and governing bodies-I probably went to 300 in the past two or three years-and you hear some really good examples and some really bad examples of what went on. There is no doubt in my mind that, in some of the early PFI individual procurements, you had a rigidity in the contracting process, which meant that head teachers and governors were left with schools that were not fit for purpose. More importantly, as the world of education changed and they realised that they needed to do things in a different way, or they wanted to open the building for more hours, the way the contracts were written was so rigid that they were completely hamstrung.

Q70 Tessa Munt: Do you think you solved that?

Ed Balls: The second thing that I would say is that I went to one of the early individual procurement academies, which was beautifully designed other than the fact that the way in which the levels tiered in the school meant that it was incredibly easy to throw things over from one level to the other, and the way in which the corridors were beautifully designed with a nice curve meant that it was incredibly easy to hide just around the corner if you were escaping having done something wrong-completely disastrous. It was brilliantly procured and designed, and it had brilliant architecture, but it was completely unfit for purpose. You have to have contractors who have experience of building schools, which we have been building over time through Building Schools for the Future. The truth was that a lot of that experience had disappeared in the early part of the decade. Secondly, you have to say to head teachers, "We must use the experience of experts so that your educational vision can be made physically deliverable." If you cut out the head teacher, it is a disaster. But if you say to the head teacher and the governing body, "You are the procurer," I think that is pretty disastrous as well.

Tessa Munt: There just has to be that conversation.

Chair: Tessa, you have had your time now. I think your very quick single point has rather extended itself.

Ed Balls: I think we agree. That is what we were trying to achieve through Building Schools for the Future.

Chair: Consensus. It is something that I am sure you have always tried to prioritise in your career. Conor.

Q71 Conor Burns: Mr Balls, you said you went back to the Department yesterday and reviewed the correspondence between yourself and the former Chief Secretary to the Treasury, and that you had agreed with the Treasury to prioritise BSF-it is worth recalling of course that this is the same guy who left a parting letter for us saying that there was no money left. Anecdotally, there was a feeling-certainly in Bournemouth and Poole-that, as we got closer to the general election, the speed of sign-off of these bids slowed down, and that there was a large number, as reported by other authorities as well, which had completed all the necessary paperwork and gone into their partnership arrangements. These bids were there and ready to go, but they had not reached financial close. Do you think there is any evidence to support the fact that people were thinking, "Let’s just hold on, because we may have to slow this process down after the general election in the light of the financial situation," which either winning party was going to inherit?

Ed Balls: Well, if I am honest, your first point is more suited to the Chamber than to a select committee. We are talking here about how we manage a multi-billion pound budget. Whatever you think about the former Chief Secretary to the Treasury, and you are entitled to your views, the accounting officer signed this off, because it was done in a proper way, and the money was there. My advice to you is to try to keep this on policy.

On the second point, I don’t know the answer to that question. I don’t get the feeling from around the country that there are 700 schools that were all anticipating the cancellation of their school buildings, because if they had been, they would not have been so devastated. There is no doubt that there would have been people in waves 8 and 9 who were frustrated. I am going to make a non-party-political point here: I had Labour, Liberal and Conservative MPs come up to me before the general election and say, "Can you get us into wave 7 before the election? We are very fearful that if there is change of Government, we will miss our chance." There was no doubt that there was a little bit of that going on here in terms of people wanting to get into BSF. I think people assumed that, once the commitment had been made, they were in Building Schools for the Future, and that the commitment and those promises were going to be honoured. That was the expectation, so I would be very surprised if people were holding back on signing contracts.

Q72 Conor Burns: My own experience, particularly in the Bournemouth and Poole area, was that a lot of them had gone in and they were ready, and the local authority had an expectation of a sign-off timeline, which wasn’t met. Other timelines-from perhaps a year before-had been a lot faster, from the submission of final signed-off documents to financial close.

Ed Balls: If that was what happened, or if that was the advice that was given, I would say the advice was very naive and I’d sack the advisers. The reality of the announcement that we saw a week ago was that if you had signed the papers, you were in if you got to financial close, and if you were even a week away, you were out. Anybody who said, "Hang on, don’t sign it and see what happens"-I would say they’ve been stuffed by this process. If that’s what they were telling people in Bournemouth and Poole-I do not know who was telling the local authority not to sign the contracts-

Conor Burns: No, the local authority had put them all in. They hadn’t been signed off by Partnerships for Schools and-

Ed Balls: I would say sack the advisers.

Q73 Lisa Nandy: We’ve talked a lot about whether the money was there, and what cuts would have been made, and the Opposition also accept that some cuts would have had to be made if Labour had won the general election. With that in mind, I suspect that you must have given some thought to what criteria you would have used, had you been Secretary of State, to scale back BSF, should that have proven necessary. I talked earlier to Mr Byles about the criteria that the Secretary of State ultimately decided to use about final closure, and projects that had reached final closure. Do you consider that to have been a fair way to approach the programme, and if not, what’s your alternative?

Ed Balls: It is still an open question as to whether the Secretary of State has acted on the basis of clear criteria. There are a number of questions remaining-we have had the Sandwell confusion cleared up, but we certainly know that what happened in Wigan is hard to understand. The treatment of sample schools is apparently still under discussion, and the Government are clearly still fraught with internal argument as to whether there are reasons to go ahead, or whether there are legal reasons not to proceed. The difficulty that the Secretary of State will get into if this comes to proper scrutiny is that he will find it very hard to produce any objective criteria on the basis of which he has made, or is making decisions. There are many delegations of MPs being led to the Secretary of State asking him to reconsider, and he is saying that he will. If he is reconsidering-he is either reconsidering his criteria or he is making it up as he goes along. I am not sure which it is.

As for how we would have proceeded, and to go back to the previous question, I don’t know what the capital budget would have been for our Department. It would have been considerably tighter than in the past. While I would have argued for the best settlement, I had no illusions that we would end up with at least a flat capital programme in cash terms, or it may have been tighter than that. It would, however, still have been a multi-billion pound programme. The judgment I made was, as I have said, that the children’s centres had been built, and that the BSF promises we had made-and were making-were important. We could have always decided to build later waves over a longer period of time, but I would have continued with the programme. The one thing I would have not have done-I have been clear on this in discussions with the Treasury and in the public domain-is reneged, after the election, on the commitments we had made to all those authorities, including the ones involved with wave 7, which we had announced was going ahead in the last year. It was explicitly agreed between me and the Treasury that, in any eventual outcome of the spending review, the money for BSF would be protected.

Q74 Lisa Nandy: Can I press you on the question of the criteria that are now being used to determine which projects should go ahead? Do you consider those criteria to be fair and if not, what alternative criteria would you like to see the Secretary of State using?

Ed Balls: If I’m honest with you, I don’t know what the criteria are, and I don’t think the Secretary of State has ever set them out. When I’ve asked what the criteria are, we haven’t had an answer-all we’ve had is a series of lists.

Q75 Lisa Nandy: I am sorry to interrupt again, but I think that you are not quite understanding the question, so I’ll ask it again. The criteria that the Secretary of State has said that he is using, are largely financial-so schools and projects that have reached financial closure are supposed to be going ahead. Now, I accept everything that you have said about the confusion about that, and I have seen it very much in my own constituency, but what would your alternative to that be? We have got quite a good opportunity here with somebody who has very recently been in this job and had to take these sorts of decisions, to try to assess the decisions that are currently being made against that standard. I am interested in what you would consider to be a fair way of discerning the future of the programme.

Ed Balls: One of the lessons that you learn about government is that what you do is more important than what you say, but it is always quite important to make sure that you align what you say and what you do-if not, you cause great confusion, which is what has happened in this case. I understand-I think-the point that you are making, although I go back to my earlier point. The fact that all those schools are under discussion, and the fact that the schools under discussion have been shifted around from list to list, makes me doubt whether there actually are clear criteria. My advice all along to the Secretary of State from pretty much the very beginning was to stop, withdraw the lists, look at it again and then come out with something sufficiently watertight that he can stick with it in the next few months.

Q76 Chair: I don’t know whether it would help in answering Lisa’s question if you were to critique the terms of reference of the capital review, because that in a sense will guide what the criteria-

Ed Balls: I think that Ms Nandy is asking a particular question: if the Secretary of State were to withdraw the list and start again, would he use different criteria? My advice to him would be to withdraw the list and then to decide in the interests of jobs, of the economy and of young people to let the 720 schools go ahead. I don’t accept the premise that the right thing for us to do is to cancel those 720 schools; I think that they should go ahead. If I had been Secretary of State, they would have gone ahead, and if there had been a Labour Treasury it would have agreed for them to go ahead as it had last year. My advice to the Secretary of State is that once you have botched something it is better to withdraw it and try again, but I do not think that fine tuning of those criteria is going to meet the needs of the economy at the present time.

Q77 Lisa Nandy: To sum up, basically what you are saying is that you don’t accept the premise of the question because you would have pushed forward with all of the projects, and I understand that.

Ed Balls: Definitely.

Q78 Lisa Nandy: But you are also saying that actually there isn’t any criterion that can be considered to be fair at this point.

Ed Balls: There are two different uses of the word "fair". There is "fair" in the sense of what best meets the needs of social justice in our society, but there is a legal term "fair" that is "fair" in the sense of non-discriminatory. What you have got at the moment is scores of private companies and local authorities which, as we now know from Mr Byles, are considering their legal position on the basis of the apparently arbitrary and unfair nature of the way in which this decision was made. It is also clear from what Mr Byles has said that legal advice has been given to the Department that not only the contractors but local authorities will have a case for legal action. That whole case for legal action comes because of the perceived arbitrary and therefore unfair nature of this decision. That is why I have always said to Mr Gove that, independent of any issue about what is good for jobs or the future of the programme, simply in order to protect the taxpayer in this matter, he should just withdraw and come back again with something that is a bit more orderly.

Q79 Lisa Nandy: May I just ask one quick final question, which is slightly different? You heard the evidence that Mr Byles gave earlier about the way in which this decision was arrived at, and the role of PfS in that. He talked about the lists that he has produced for the Secretary of State against different criteria. What I am trying to understand is the role of PfS in providing advice. Is it likely that PfS would provide a recommendation to the Secretary of State about which criteria he ought to use, or is it the case that those lists would simply have been produced with no recommendation for the Secretary of State to consider?

Ed Balls: I can talk about only my own experience rather than what actually would have happened in this case. The thing to understand is that there were certain non-negotiable aspects from PfS’s point of view about deliverability and financial probity-the legal underpinning. There was also a set of choices about the impact of the outcome on different schools, and about cost. From the point of view of the Secretary of State, it is almost certainly the case, I hazard, that on issues of cost, advice would not simply have been coming from PfS through the Department to him; there would also have been a discussion with the Treasury and, possibly, with No. 10. The Treasury would have kicked back and said, "Within your choice, on a range of criteria, the cost will be higher than we want to pay-think again."

In my reading of what has happened, the Department delayed too long and caused uncertainty in the market. The Financial Times suddenly published one or two stories at the end of the week before about the market getting into a state. Also, post-election, local authorities were making decisions to proceed. Advice would have come to the Secretary of State, saying that the situation was legally very dangerous from the Department’s point of view. Others would have been saying, "You must provide certainty"; others would have said, "Yes, but don’t make any financial commitments." The wise advice from the Department was to put a halt on it, think about it, and then make decisions. That advice was ignored in a desire to reduce cost and provide certainty, and the situation has turned out to be disorderly, because it all happened too quickly. Good government is about taking time and getting it right.

Q80 Liz Kendall: If you had your time again as Secretary of State, and you had been in the Department before BSF was initiated, what would you have done differently?

Ed Balls: My shadow Cabinet colleague, the shadow Foreign Secretary, has in recent weeks regularly cited beginning BSF as one of his great contributions, and I think that he is right about that. The time had come for BSF at that point in 2004, when we had dealt with the first backlog, but there was a big moment of opportunity. I remember the meeting that I had when I was chief economic adviser at the Treasury with the then Schools Secretary to talk about the scale and ambition of the programme. At that time, it was very innovative to set out a capital programme of this longevity.

To go back to Mr Stuart’s question about transformation, it is impossible to achieve capital transformation if you carry out annual budgeting on capital; it is difficult to achieve with three years’ budgeting on capital, because of the nature of the lags and the scale of the programmes. It was very ambitious, therefore, to set out a 20-year programme.

Q81 Chair: What would you do differently, Mr Balls? That was the question.

Ed Balls: The question was whether I would have started the programme again, and the answer is yes.

Q82 Chair: I ask, if you feel that you have not been asked before, what would you do differently? What lessons can be learned, because we have a review? The new coalition Government will be looking at the programme again, so from your experience in the Treasury and then in the Department, what are the key lessons to learn that can be taken forward in a new capital programme?

Ed Balls: The question was about what I would have done if I had been there in 2004.

Q83 Liz Kendall: May I say what my own question was, gentlemen? It was, knowing what we now know about how the programme has worked, what would you do differently if you had your time again?

Ed Balls: That is a good question, which Mr Byles answered and I will answer, too. At the time in 2004, we made the right decision. In retrospect, we learned things about the pace of transformation, which took longer than expected, and about the importance of co-ordination across the local area, which was captured in the LEP. We also learned the massive importance of local strategic leadership in both the local authority and in individual schools.

This is no credit to me-great credit to Tim Byles of PfS, Jim Knight and Vernon Coaker-but I think that we were in a really good place with BSF. The programme had learned the lessons and was fit for purpose, which is why it is distressing to see something that was going to be transformational suddenly undercut. A sensible capital review would quickly conclude to go back to the status quo ex ante.

Chair: Thank you, shadow Secretary of State, for giving evidence to us today.

Ed Balls: I am not sure whether you are intending to have me here regularly.

Chair: I don’t think so, but that was very kind of you. If that was an offer, we will take that on advisement, as they say. Thank you, and we look forward to seeing the Secretary of State tomorrow morning.