Government's Building Schools for the Future programme '£10 billion over budget' - report » Local Government » 24dash.com

The Government's ambitious programme to rebuild or refurbish every secondary school in England is up to £10 billion over budget and almost two years behind schedule, a damning report concluded today.

The Department for Children, Schools and Families (DCSF) and Partnerships for Schools (PfS), which was established to deliver the Building Schools for the Future (BSF) programme were "overly optimistic" in how quickly the first schools could be renovated and reopened, the National Audit Office (NAO) report found.

Ministers originally said 200 schools would be open by December last year, but local authorities only managed to complete work on 42 in that time.

Fifty-four schools are due to open this year, and 121 next year, the report said, with the 200th school forecast to open in September 2010 - a delay of 21 months.

Ministers want to see work completed or under way at all secondary schools by 2020.

But the report found that in order to achieve this target "the number of schools in procurement and construction at any one time will need to double over the next three years".

It concludes: "Original expectations of how quickly schools could be built were overly optimistic. PfS will find it very challenging to include all 3,500 schools in BSF by 2020."

The report added it was estimated the cost of the BSF programme will be between £52 and £55 billion - a 16-23% increase, or £7 billion to £10 billion more than was estimated at the outset.

The report said: "The majority of the increase is because the Department has increased the scope of the programme and has agreed to provide additional funding for the inclusion of Academies, Special Education Needs facilities, Voluntary Aided schools and carbon reduction measures.

"About a third of the increase in the estimate is because the original estimate assumed building costs would rise with general inflation, but building cost inflation is now estimated to have been twice general inflation up to 2008.

"To meet these costs and accelerate the programme to start all schools by 2020, annual expenditure on the programme would need to increase from £2.5 billion a year to between £3.4 and £3.7 billion a year at current prices from 2010-11 onwards."

Schools minister Jim Knight insisted that the BSF programme is "building momentum" and said the government was "fully committed" to seeing it through to completion.

He added: "The NAO reports that we were overly optimistic in our assumptions of how quickly the first schools could open. This is an unprecedented project, never attempted before by any other country - it is not a race to spend the money as quickly as possible.

"We have always been upfront about the early delays but we've listened and learnt lessons. We want value for every single penny of taxpayers' money - which is why, as the NAO reports, we insisted those first projects took more time to improve their proposals."

The NAO report did find that BSF schools are built to higher specifications and space standards than previous schools, and that the prices of the buildings have been kept under control by funding arrangements put in place by the DCSF.

But it said that it was too early to judge whether the BSF programme is effective in improving the quality of education.

It added that in terms of value for money, local education partnerships are allowed to develop BSF projects without competitive tendering, during a 10-year exclusivity period.

These exclusivity arrangements could make it harder to price projects economically, as a private sector company would not need to demonstrate how efficient it is by competing against rivals.

Speaking about timescales for the project this afternoon, PfS chief executive Tim Byles said it was planned that work on 300 schools would be under way by 2011, more than the NAO's estimates.

He added later: "The vast majority of both local authorities and private sector players in the market believe that BSF provides a better way to invest strategically in our schools and there is early evidence that the Local Education Partnership model is leading to further cost and time savings.

"In these uncertain economic times, the NAO recognises the view that BSF is less susceptible to market conditions than other large scale infrastructure projects."

He said that problems referred to in the report relate to the early days of the programme, which have been addressed.

Addressing concerns about spiralling costs, Mr Knight said: "The NAO finds that BSF prices are in line with non-BSF building costs. The bulk of this overall rise is down to expanding the entire scope of the programme since its inception. Education policy does not stand still and nor has BSF - that's why this once-in-a-generation programme now includes academies, Special Educational Needs facilities and cutting carbon emissions."

He added: "The NAO reports that the impact of the current financial climate on BSF remains unclear. We are confident that BSF was the last sector to be affected by the economic downturn but is well placed to be the first to come out."

Ian Fordham, deputy chief executive of the British Council for School Environments said the findings were "welcome and timely".

He said: "We echo the report's findings around the importance of leadership - it is clear from the report that local authorities, architects and those working to deliver BSF on the ground are making things happen within the constraints of what is an evolving process.
"It's important that all parties continue to build confidence in this vital investment. Improving the quality of delivery and the quality of the process is crucial to this confidence building."

Shadow Children's Secretary Michael Gove said: "The Government's shambolic handling of its project to refurbish schools means it will now cost the taxpayer £10 billion more than planned. Ministerial estimates about cost have risen by more than 20% overnight.

"At a time when family budgets are more stretched than ever, we simply cannot afford this level of mismanagement in Ed Balls's department."

Liberal Democrat schools spokesman David Laws said: "Local authorities were given unrealistic expectations about having all their secondary schools rebuilt. Many are now left wondering if their much-needed new schools will ever be built.

"It is staggering that the people involved with this chaotic programme are apparently receiving performance bonuses. With spiralling costs and lengthy delays, such bonuses should clearly be withheld."