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James Review slams system for capital investment in schools

An independent review of capital investment in schools has slammed the system as “not fit for purpose” and suggested that the public sector had consistently failed to get the value it should have done out of the Building Schools for the Future programme.

Sebastian James, a director at electrical retail giant Dixons who led the review, acknowledged that while civil servants, local authorities and frontline professionals had done their best to administer the system they were asked to use, it had been working against them.

His recommendations include creating a “single, strong, expert, intelligent ‘client’ acting for the public sector in its relationships with the construction industry and responsible for both the design and delivery of larger projects”.

This central delivery body and procurement model would be accountable for delivering major projects on time, on budget and to the right quality. The body should also put in place a small number of new national procurement contracts to drive quality and value from the programme of building projects, the report said.

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James accepted this was a “philosophical shift” in approach as it would mean that the Department for Education would deliver a building rather than money. It currently supplies money to responsible bodies, such as the local authority, a diocese or an academy trust.

In his letter to the Education Secretary, James said: “I have found that the system of capital allocation and spending which has developed over the last decade has frequently resulted in poor use of resources, a bureaucratic system from providers and local authorities and a mixed – and at times poor – outcome for both parents and children.

“The schools building programme, Building Schools for the Future, has been one of epic proportions, at least in terms of the money deployed. However, because procurement has not been sufficiently centralised, and because the government has not ensure that contracts are always negotiated by those who have the appropriate expertise, the public sector has failed consistently to get the value it should have done, given the commercial leverage that this scale of programme should command.”

James added that he believed there were some “very significant” opportunities to increase the amount of schools regeneration that could be undertaken for any given sum of money. A pilot in Doncaster had suggested that as much as 30% of the total money spent could be saved, he argued.

The main issues identified by the report were:

  • The capital allocation process was “complex, time consuming, expensive and opaque”
  • The design and procurement process for BSF was not designed to create either high and consistent quality or low cost. “Procurement starts with a sum of money rather than with a specification, designs are far too bespoke, and there is no evidence of an effective way of learning from mistakes (or successes).”
  • A lack of expertise on the client side “meant that there was little opportunity to improve building methods in order to lower costs over time, especially for very large and complex BSF projects”.
  • Devolved funding processes did not deliver efficiently the objectives that they were established to achieve. Funds were diverted to those adept at winning bids rather than those most in need.
  • The quality of maintenance across the estate is “extremely variable”
  • The regulator and planning environment is “far too complex and hostile” for building schools. “The individual nature of the buildings that have been built historically also meant that every project had to run the gauntlet of these regulations”.

The report called for reforms to be implemented as a matter of urgency and made 16 recommendations. In addition to establishing a single ‘client’, these include:

  • There should be a clear and agreed goal for capital expenditure in England: “to create enough fit-for-purpose school places to meet the needs of every child”
  • Capital allocation should be determined using objective information on need for pupil places and on the condition of the local estate. “At a local level this notional budget should be turned into a light-touch local plan to achieve the overall goals of the investment”
  • New buildings should be based on a clear set of standardised drawings and specifications “that will incorporation the latest thinking on educational requirements and the bulk of regulatory needs”
  • Responsible bodies would be accountable for maintenance. “They would therefore have a long-term responsibility to maintain their own facilities as well to work together in a local area to ensure the education estate meets or exceeds the needs of local children”.

The report said its recommended approach would not conflict with the government's goal of increasing local autonomy. "Local responsible bodies will decide on the type of investment needed locally, and on how that investment should be prioritised," it said. "The responsibility for using and managing new and improved facilities is wholly devolved."

Welcoming the report, Education Secretary Michael Gove said: “I welcome this independent report and we will respond soon. The system we inherited had profound problems. We must have a system for school building which is much simpler, less bureaucratic, and which targets priority projects.”

Peter Hill, Associate Director at TPP Law, said the James Review offered "a common sense, thrifty approach", with the potential to simplify the funding allocation system for education projects, reduce DfE workload and DfE running costs.

"On the up-side, this is a no-frills approach providing a sensible response during a period of austerity," he added.

However, Hill warned that there were controversial elements "where the jury may still be out". These include: the role of local authorities as co-ordinators of local investment plans; sacrificing of bespoke design and extensive involvement of stakeholders at project level; a more centralised procurement system; and reduction of choice around equipment procurement such as ICT.

The report, Review of education capital, can be viewed here.

Philip Hoult

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