Jill Cameron gives a comprehensive briefing on the highs and lows of the Building Schools for the Future initiative from her personal experience with the programme
I decided to respond to the request in a recent issue of School Financial Management for anyone with personal experience of Building Schools for the Future (BSF) to come forward. I am a school business manager at Stoke Newington Media Arts and Science College in the London Borough of Hackney and building work has just started on our site.
I’m going to start with some health warnings. First, this very much is a personal perspective. Hackney is in one of the earlier BSF waves (wave 2). I believe there have been changes to the process since we experienced them. On top of this, each local authority will have its own approach. That said, I would imagine much of what I am about to say will be applicable to any school undergoing BSF. Second, this article is mainly pitched at people who are new, or on the earlier stages of BSF. If you’re well down the BSF road, you may find it interesting to compare notes, though. Finally, without taking over the whole of this edition, it’s impossible to go into huge depth about this complex process. At the end of this article I provide a few useful internet links (including my school BSF blog) if you want to find out more.
What is BSF?
Very briefly, BSF is the biggest school capital investment programme since the Victorian era. It will be delivered in 15 waves, and, at the time of writing, participants in the first six waves had been confirmed. Many authorities in later waves have been given the go ahead to select one school as a ‘pathfinder’. Each authority will also divide its schools into phases, choosing two or three to be ‘sample schools’. One of the stated aims of the programme is to deliver educational transformation through buildings and ICT delivery. A compulsory part of the BSF process is for ICT delivery to be moved from schools to what is termed the local education partnership (LEP – see below). Some, but not all, facilities management services also have to be delivered by the LEP. BSF uses a new procurement process, which involves the establishment of the LEP arrangements, which are public/private partnerships. The successful bidder will hold an 80% stake, Partnerships for Schools (PfS) hold 10% and the local authority, the final 10%. It is not PFI, although it is a close relative, and many BSF new build schools will actually be PFI schools.
This is very lengthy and consists of the following stages:
Getting to this stage will have taken approximately 14 months. There are two other important activities we undertook while this was going on. A reference scheme for our school was prepared by an independent architect, which demonstrated that what the school wanted could be achieved within budget. We also participated in a Design Quality Indicator (DQI) session. This is a mandatory process aimed at supporting schools in identifying their design priorities.
We’re now at the stage where bidders, and unfortunately lots more acronyms, start to appear:
I work in a sample school and involvement with the project has been very intense. My advice to sample schools would be not to underestimate the amount of time BSF will take up. No headteacher will realistically be able to devote an adequate amount of time to it. I was fortunate to be stepping into a newly created post, and was able to make BSF one of the major parts of my job. I would strongly recommend that one person in the school is the BSF lead, but that other members of staff with specific expertise should have roles in the process. Our school network manager’s work on the ICT strand has been invaluable, for example, even though he knows BSF will result in his job being phased out!
BSF comes in fits and starts, but, during the more intense phases of the process, doing it properly is a full-time job. The main things that schools need to do are as follows:
Financial management implications
BSF certainly pumps much needed capital investment into schools, but there are financial implications that you will need to take into account.
Any school involved in BSF, but particularly any sample school, will need to consider how best to resource the project. Discuss resourcing with your local authority BSF team to see what they can offer in terms of expertise and financial resourcing. You can then work out the best approach for your school. Unless you are very lucky, it is unlikely that your local authority will cover the full costs of your school’s involvement with BSF, so you will need to take this into consideration for budget planning.
Value for money
The costs of BSF are enormous, although they are not directly borne by schools. In my view, the process is over-lengthy and extremely cumbersome. We have been working with the project for almost three years. Most meetings involve between four and 12 consultants and members of the bidding teams. The winning bidders recoup their bid costs from the project. For example, £21million has been allocated to our school, of which only around £18 million will be spent on the building itself. Our final bidders have been very open and honest, and show their profit across all strands of the project, but I feel strongly that a more streamlined method of delivery would have resulted in a higher proportion of funding getting to the school. I very much hope that the changes that have been made to the process have addressed this.
‘I’m looking forward to the day our students finally get to learn in a well designed school with no leaky roofs, and ultimately that’s what it’s all about’
Loss of control
I believe that BSF reverses much of the devolution of control and budgets to schools which has taken place over the past few years as a result of Local Management of Schools (LMS). Schools have got used to managing their own ICT and facilities services, and most are now very good at it. Schools will now lose control of ICT network management and some elements of facilities management services. Staff will be transferred to the new LEP. The role of the on-site network manager will gradually disappear. Our school ICT team of three will reduce to 1.5 technicians. There is no role for the network manager, as management of the network will be off-site. He has been guaranteed a job within RM (our ICT partner), but it will be very different to his current role. This should leave schools more able to concentrate on the core business of education, but is an aspect of BSF that will be welcomed more by some schools than others.
BSF offers capital ICT funding at the level of £1,450 per student for five years. Schools are then expected to contribute a set amount per student for revenue costs. In our case we will be contributing £90 per student, but it is acknowledged that this will not be sufficient to cover the full revenue costs, so I would expect most schools will be expected to make a higher contribution. We also anticipate that we will need to top-up the capital allocation, and have included this in our long-term financial projections. Participation in the ICT contract is for five years, and services will start following completion of the building project, although an alternative ‘transitional services’ package is also on offer.
Schools will be offered a variety of facilities management packages through BSF and will decide at what level they want to buy in. Full buy-in will involve transfer of facilities staff to the LEP. Some of these packages, particularly those ensuring the proper maintenance of the building, will be compulsory. The more services purchased from the LEP, the more cost-effective the offer will become, although, despite this, schools may wish to retain more control and, by opting out of some elements of the offer. The initial contract will be for 10 years, with services commencing as soon as possible after financial close. There will be an agreed period of mobilisation where penalty payments for unmet targets will be relaxed. The LEP is intended to be operational and providing school services for 30 years.
You will need to be very thorough in ascertaining what these might be. Will ICT consumables be covered, for example? How about cleaning and maintenance of kitchen equipment if the LEP are not running catering services? You will almost certainly find that costs of rectifying accidental damage and vandalism during hours of school occupation will not be covered by the contract, so you will need to estimate a budget for this. The school will have to pay for any maintenance outside of the contract, such as additional electrical sockets or partitioning. For this reason it’s really important to try to get your requirements right from the outset.
Facilities management costs will almost certainly be higher than current school costs, although a high level of service and performance is offered. Be aware that costs are based on square meterage, which, for many schools, will increase as part of BSF. Although this is an element of formula funding, the increase in delegated budgets will be minimal.
Our long-term BSF financial model shows that, during the five years of the ICT contract, additional facilities management costs are balanced out by savings on ICT. This financial year, and possibly next, will be difficult, as the ICT contract does not begin until after completion of the building.
This is alleviated a bit by our ability to draw down ICT capital funding from financial close, the fact that the LEP will be funding new furniture, and that our repairs and maintenance budget will be reduced when 50% of our building is taken out of action for building works. After the end of the ICT contract there is no further commitment to ICT capital funding, and we are concerned about the impact BSF will have on our budget from that point onwards.
BSF cost increases are index linked, but the minimum funding guarantee for schools over the next 3 years is 2.1% – below the rate of inflation. Also, 2.45% teachers’ salary increases and employers’ support staff pension contribution increases this year will add to pressure on school budgets in the long term. Any school business manager that has had to manage a difficult budget will know that ICT and non-essential premises expenditure are areas where short-term reductions in expenditure can be made. BSF will not allow this flexibility and savings will have to be sought elsewhere. On a more positive note, confirmed costs do allow for more accurate long-term financial planning, but schools should be aware of the financial honeymoon! We will not know the longer-term impact of BSF on school budgets until the end of ICT contracts for the first few operational BSF schools in approximately five years’ time.
In the run-up to BSF our Devolved Formula Capital payments have been withheld. Throughout the life of BSF, 50% of our allocation will be held centrally to pay for ‘life cycle maintenance’ (the proposed programme of redecoration, recarpeting, etc). The percentage withheld will vary from authority to authority, and, in our case, the local authority is contributing a higher sum of money to this fund than we are, meaning that this is a good deal for our school. It is not clear what will happen if formula capital funding ceases.
In our case our budget is being top-sliced, ie school budget payments will be made to us, minus our portions of facilities management and ICT funding. Apparently this is common across BSF schools. There is an agreement that this will be held in a central account and interest earned will be split across participating schools pro rata.
Bidders are paid a set amount each month. As the contract is with the local authority, payments have to be made by them rather than by schools. There are areas where there might be variation from the agreed monthly amount. Bidders have to meet performance targets known as KPIs (key performance indicators), and there is a financial deduction each time a target is not met. These financial penalties will be reimbursed to schools. To balance these out, there will also be a charge made to school for any services outside of the contract. In our case, there will be a termly agreement on these adjustments, with a payment then made either to the school or the LEP.
I could have written a much longer piece on BSF. I have tried to concentrate mainly on financial management implications, but I would imagine that many school business managers will be involved in the programme in a far broader way. If nothing else, I’m sure that this article has demonstrated that BSF is a large and complicated beast, and I know I’ve only scratched the surface. I believe adjustments need to be made to the programme to ensure better value for money and a more streamlined process that keeps momentum and enthusiasm for what BSF can offer. Despite this, most schools and governing bodies will believe that the pros outweigh the cons and, at the time of writing, no school has pulled out of the programme. I’m looking forward to the day our students finally get to learn in a well designed school with no leaky roofs, and ultimately that’s what it’s all about. If you would like to contact me directly with any questions I can be reached via the Stoke Newington School BSF blog (link shown below).