Coalition Government scathing about its inefficiency and waste

LEPs criticised in recent  debate as wasteful

Government review looking at different models for improving delivery


The Secretary of State for Education announced on 5 July that the Government  would end the previous Government’s BSF  school rebuilding programme. But the end of the BSF programme does not mean the end of investing in schools.

The Government says it is still  “absolutely committed to rebuilding and refurbishing, but we do not believe that the BSF programme was spending taxpayers’ money anywhere near efficiently enough, and money wasted on that programme was money that could not be used elsewhere, either in schools or other parts of the education establishment.”

Junior Minister Tim Loughton, in a Westminster Hall 21 July  debate, was scathing about the BSF programme. One individual consultant , from KPMG as it happens, earned an eye watering £1.3 million on one project. The Minister said “ The programme has been characterised by massive overspends, tragic delays and needless bureaucracy. Its startling inefficiency means that stopping the programme was the right thing to do. Having extended its scope, its budget bulged from £45 billion to £55 billion, and its time scale went from 10 years to a projected 18. Of the £250 million spent before building began, £60 million was spent on consultants or advisory costs to support layer upon layer of process. In some areas, it took more than two years to negotiate the bureaucracy, and that was before a single builder had been engaged or a single brick laid. Only 5% of the 3,500 secondary schools in this country were rebuilt, refurbished or received BSF funding for ICT-only 185 schools, which is astonishingly few given how much money was spent. Perhaps worst of all, considering the state of public finances, is that BSF schools cost three times what it costs to procure buildings in the commercial world, and twice what it costs to build a school in Ireland.”

In all this it seems the role of local education partnerships-has  been overlooked. They are  the public-private partnerships between local authorities and a private sector partner selected to carry out contracting for the local authority and are relevant to the BSF and the Academies scheme. The private sector partner is  selected in open competition under European Union procurement rules. It is a joint venture company focused on delivering BSF investment and charged with making every aspect of the planned school improvements a reality. Although the original  reason for establishing LEPs was specifically to support BSF projects, some local authorities have chosen to use their LEPs for projects outside BSF, including Academies.

In local education partnership academy projects, the school that is converting to an academy is not the client; the local authority is the client and there is growing evidence that the arrangements do not necessarily secure best value and can be extremely  frustrating for Academy sponsors who see unnecessary costS incurred as contractors  seek a high return on their investment .   Academy Sponsors   are sometimes obliged to take on the LEP procurement process rather than  participate in an open tender system. The LEP  system can be bureaucratic, inflexible and needlessly wasteful  according to some but this does seem to depend largely  on which LEP your are talking about. It is not uncommon that, typically,  an LEP is  80% owned by the  contractor ,10% owned by the respective  local authority(ies) ie it can include more than one authority,  and 10% by Building Schools for the Future Investments (BSFI), which is the funding arm of the BSF programme.

Charlotte Leslie, the new and energetic  Bristol North  West MP and Education Select Committee member , in a Westminster Hall debate,  claimed that some Academy sponsors are actually being put off sponsoring Academies if they know an LEP arrangement will  be in place, because they are aware how time consuming and costly the current system is.

Leslie  cited an example of waste. A school was forced to take the LEP ICT option, even though it already had its own ICT equipment that it could run itself, and which was fully functioning and used to great effect. That equipment was not compatible with the LEP version of ICT equipment required, so it was replaced at great cost, with complex contracts having to be negotiated. New ICT equipment had to be bought in at the taxpayer’s expense, and the school’s existing, perfectly functional ICT equipment became redundant because of the rigidity of the procurement process.

Leslie is also worried about transparency and accountability. She gave another example in her constituency, concerning the rebuilding of  a Primary  school in which three options were initially on the table  but  the least attractive option, for local stakeholders that is, was ultimately  chosen,  with no transparency in the decision-making process  . She said that as    90% of the LEP was owned by the contractor Skansa,  it has been asked whether Skansa’s interests are driving the school rebuild, or whether the rebuild is being driven by the interests of the school, parents and education. (the actual  figures are 80% Skansa, 10% Local Authority and  10% BSF partnership)

The Government  is reviewing procurement and delivery models as part of the terms of reference in its capital review. The aim of the review is to ensure that future capital investment represents good value for money and that it responds to schools’ real needs. The review will report to Ministers in mid-September, and a forward plan for capital investment over the next spending review period will be produced by the end of the calendar year. The terms of the Review are-  ‘To review… the department’s existing capital expenditure and make recommendations on the future delivery models for capital investment for 2011-12 onwards.’ “The overall aim of the review is to ensure that future capital investment represents good value for money and strongly supports the Government’s ambitions to reduce the deficit, raise standards and tackle disadvantage.”

Tim Loughton, the Minister replying,  said that it was  clear to him that  “ LEPs are part of a truly cumbersome process, which needs to be closely examined and fundamentally re-engineered to ensure that a higher proportion of our capital investment gets rapidly to the schools that need it most.”  On Leslies specific criticisms of the Bristol LEP he  suggested that its track record in delivering Secondary schools was  actually  “generally solid in terms of budget, quality and programme.” But he conceded, significantly,  that “ the LEP model in Bristol has not proved so adept in delivering smaller-scale primary school projects where the needs of the local communities required a greater level of consultation and understanding”.

In short, the Government intend bringing  about changes informed by its Review.

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