Priority booking

The Priority Schools Building Programme has finally been given the green light. Annie Moy looks at what it entails.

The long-awaited Priority Schools Building Programme, which will provide £2.4bn to rebuild 261 schools, has finally launched, with the first schools due to open in 2014/15.

In a major departure from previous school building programmes, the programme delivery will be managed centrally by the DfE’s Education Funding Agency (EFA), rather than by local project teams.

Schools need to get an early handle on the procurement process if they want to have some influence over it.

Who does it affect?

Organisations

• All schools, whether academy or maintained, community, VC, VA or foundation
• Owners of school sites
• Local authorities
• School contractors.

Roles

• Head teachers
• Governors
• Business managers
• Legal advisers
• Education departments
• Procurement managers.

How will the procurement process work?

The 261 schools have been split into regional batches and the EFA will hold a separate procurement exercise for a contractor to build the schools within each batch. The programme will be staggered over the next five years, with four or five procurement batches taking place a year. 219 of the schools will be rebuilt under PFI contracts, however in the first year there will also be 42 capitally-funded schools using design and build contracts.

The intention is that the procurement process will be more streamlined and cost effective than the previous BSF programme. The message is to “do more with less” and to make the limited funds available benefit as many schools as possible.

Rather than the local authority, foundation/academy trust or diocese selecting a contractor and entering into a contract for the construction of the new school, this will now fall within the EFA’s remit. The EFA will in turn require the academy trust/governing body, and where it is a different body the landowner, e.g. the local authority for a community school, to enter into extensive back-to-back arrangements with the EFA directly.

These back-to-back arrangements are necessary to deal with matters such as granting unimpeded access to the contractor, and agreeing the level of the school’s contribution, from its own budget, to the unitary charge (often called the “relevant proportion”) for PFI schools.

In respect of each batch, the bidding contractors will initially design a sample scheme for only one or two of the schools, which will form the basis of the evaluation by the EFA. The selected contractor will then roll out a broadly similar design at the remaining schools in the batch. The procurement process is anticipated to take around one year before construction will commence at the first school in the batch.

Unlike BSF, soft facilities management and managed ICT services will not form part of the PFI contracts. Schools will need to make their own arrangements to procure these services and will be responsible for ensuring that the EFA’s minimum requirements are met.

The build cost per square metre will be lower than BSF and is expected to be capped at around £1400m2. Rather than each school being individually designed the EFA will be looking to contractors to produce economies of scale through replication of design by using a kit of parts or off site volumetric building solution approaches.

Key issues for schools

For PFI schools:

• Calculation of “relevant proportion” to be contributed by each school. This will be at the heart of the back-to-back agreement with the EFA and there are several different ways of constructing it. A key issue is how “demand risk” is catered for (i.e. the impact on a school’s budget of a decline or an increase in pupil numbers)
• Factors that warrant adjustment of the “relevant proportion”, e.g. inflation, any risk share on utility costs/consumption, impact of changes in law etc, plus the impact of other schools joining the arrangements later in the contract period;
• Attribution of deductions made under the payment mechanisms – how should deductions made from payments due to the relevant contractor be apportioned as between the authority and the school?
• Under the main project agreement, the EFA will enter into arrangements for sharing risk of damage to the facilities and related insurance arrangements; these need to be appropriately “flowed down” to the back-to-back agreement.

For all schools:

• Early identification of any complicating factors relating to land ownership for the proposed site/adjoining sites in relation to the proposed build itself and access issues and similarly any potentially complex planning related issues
• Unlike BSF, the role of the school in the process will be very much reduced. The project client will be the EFA albeit that the schools will be the end users. This has advantages for schools in that less senior management time will need to be committed but also disadvantages in that schools may feel that they have inadequate input into the design process in order to be satisfied that the building will be fit for the school in question. Schools would be well advised to talk with those who have been through the process previously and to thoroughly prepare for their brief for the initial meeting with the EFA
• Key messages from the EFA and leading contractors are that schools in the PSBP need to be realistic in the solutions they are expecting and not to take previous BSF schools as a likely blueprint for what will be achieved on an individual school basis under the current programme
• Schools should start their planning at an early stage for the procurement of facilities management services, as the EFA will require the schools to ensure that these services meet minimum standards. It will also be necessary for schools to run a competitive procurement process before awarding a contract for the services – failing to do so could lead to a legal challenge.  

Schools and academies across many local authorities in England are involved in projects to deliver first rate learning facilities. In doing so it will be important for schools to check that they understand their liabilities under the back-to-back arrangements with the EFA.

Annie Moy is a Partner at Sharpe Pritchard. She can be contacted on 020 7405 4600 or by This email address is being protected from spambots. You need JavaScript enabled to view it..