November 2010

Kate Orviss looks at the impact on education of the Comprehensive Spending Review.

In the last edition of Building for Education I explored what I referred to as a seismic shift in investment in education in light of the changes announced at the beginning of July with respect to the Building Schools for the Future Programme.
I concluded that article with the following paragraph:
"Everything depends on the outcome of the Comprehensive Spending Review in October. That review will determine how much money will be available for investment in education for the next 3 years. And once there is clarity over how much money is available we will need clarity over how the Government intends to make that money available. It is hoped that the outcome of the Independent Capital Review builds on lessons learned as opposed to trying to reinvent the wheel. Only time will tell."
So, now we've had the Comprehensive Spending Review are we any clearer about the impact on investment in education?
What did the Comprehensive Spending Review say about capital investment in education?
"£15.8 billion of capital funding over the Spending Review Period. The Government will rebuild or refurbish over 600 schools from the Building Schools for the Future (BSF) and Academies programme. The decision to end BSF will allow new capital to be focused on meeting demographic pressures and addressing maintenance needs"
On the face of it this must surely be good news? £15.8 billion of capital funding to 2014-15 must demonstrate a commitment to improve the schools estate? And the clear commitment ("The Government will meet the commitment to rebuild or refurbish over 600 schools from the BSF and Academies programme") must mean that those schools which missed out on BSF will not be left abandoned.
This is certainly what the Comprehensive Spending Review says. Surely this must mean that there is some solid replacement for BSF? £15.8 billion is a significant amount. But to put this into perspective it is merely double the size of the Department of Education's capital budget for 2010-11 alone. This means that in reality the capital spending in schools for the next 5 years has been slashed by 60%.
So, it isn't quite what we expected from Mr Osborne’s speech and it is still not clear how this money will be used.
How might we expect to see capital investment in education taken forward?
We know that the Department for Education has consulted with respect to how to continue school building projects. That review was led by Sebastian James and consultation closed on 17 September. Since then the Capital Review Team have been working hard to draw up their recommendations which we are hoping will be presented before the end of the year. It is not clear when we can expect those recommendations to be implemented.
We don't know what those recommendations will look like in detail but might we be able to speculate about the future.
Some say there will be fewer new build projects. This would seem right - surely in a world where we are coping with major cuts everywhere a shiny new building is difficult to justify? So, might this mean more refurbishment schemes? More patch and mend? It would certainly be cheaper to approach schemes in this way.
Others believe that schools may be packaged up into multiple school schemes to attract more diverse bank and sponsors appetite, in much of the way of the old "bundled schools" approach that preceded BSF in England and Wales, and until relatively recently, was the case in Scotland. This may also be the case – particularly if there is a drive to reduce the costs of procuring and delivering projects. But this needs to be considered in conjunction with the impact of another key element of the Comprehensive Spending Review - the shifting of responsibility for the revenue costs of PFI schemes from local government to the sponsoring central government department. George Osborne said that he was doing this "to remove perverse incentives for projects to be delivered through PFI [Private Finance Initiative]" which is an interesting way of explaining it. It must be likely that this will have a major impact on the number of schemes which come forward using the traditional PFI model.
We know that the Conservatives in opposition were never keen on the BSF model and that they favoured the Swedish Schools model where there was less emphasis on building great big new schools and more on making use of existing facilities which were not necessarily built to be schools. We also know that the Coalition Government places a great emphasis on improving teaching standards and would prefer to invest in that rather than creating new educational environments.
This is all part of the Big Society agenda – which is still not terribly well defined. But there is definitely a shift away from central control to local decision-making and education and provision of school facilities is clearly going to be at the heart of any such local agenda. Particularly where there are no PFI credits and authorities need to choose carefully how they spend their money - a big new school or jobs?
What has happened to the "saved" schools under the BSF programme?
You will recall that after some toing and froing it was announced that a number of schools in the BSF Programme were "saved" and would proceed. What people may not be aware of is that even some of those schemes are now being placed under additional pressure to find a further 40% saving. This will include some of the sample schools which might reasonably have expected to see their way through construction without further trauma. 
It seems, therefore, that even those schemes which were thought to be safe still have hurdles to get over.
When will we know how capital investment in education will be taken forward?
There is some time to wait until we have a definitive picture of what the post-Comprehensive Spending Review landscape is for capital investment in education. The first piece of the jigsaw will be the Department for Education's own business plan. Then we will need to understand the recommendations of the Capital Review Team. And finally we will need to understand which of the recommendations are to be taken forward and within what timescale.
The build up to the Comprehensive Spending Review has been described as a masterclass in expectation management. And it is true that at a first glance it was good news for education. It is only when we delve into a little more detail that it begins to be clear that maybe the picture is not quite what we initially thought. There will be capital investment but the form and timing of that investment is not clear. It may be many months before the picture is clarified.

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