Educational funding is in short supply after the jettisoning of BSF
The state Education sector is undergoing major change, heralded by the election of the coalition government last spring.
Within two months of becoming education secretary, Michael Gove cancelled the remainder of the Labour Government’s £55 billion Building Schools for the Future programme.
Plans to renew every state secondary school in England by 2023 – with aspirational designs, year-long procurement processes and billion-pound contracts all part of the process – went in the bin.
While the government is still to publish its final word on what will follow BSF, implications for clients are clear. Many local authorities have a great need for school buildings work but little money to pay for it.
“Councils have lower budgets and are more accountable for every penny they spend,” said Willmott Dixonhead of education Peter Owen. “The things they want from contractors are certainty and de-risking. They want to know they will not incur any extra costs.”
Mr Owen said councils were starting to look to independent frameworks such as Scape and Improvement and Efficiency South East to find construction companies.
“If clients go to lowest tender, they lose a lot of certainty,” he said. “They want to work with contractors they know, which is why the frameworks are holding up.”
Councils will be told in December whether their applications for funds through the government’s privately financed Priority Schools Building Programme have been successful. This is expected to generate about £2bn of work on 100 secondary schools and up to 200 others such as primaries, special schools and sixth form colleges.
But Local Government Association senior adviser Mike Heiser said: “We would expect the Priority Schools Building Programme to have been oversubscribed, so some councils will miss out, while others may have chosen not to use it as they have no experience of private finance.”
He said some local authorities were looking to raise their own funding, whether through the sale of other educational assets or Section 106 contributions from developers.
“There is less money, and councils are looking for clever uses of space and budget as well as mechanisms to allow lessons learnt on one job to be carried through to the next,” said Mr Heiser.
The government is also funding procurement of 71 academy projects worth £800m between June 2011 and December 2012, as well as up to 63 free schools over a similar period.
Procurement processes through Partnerships for Schools’ national framework have been drastically shortened under the new government, designs have been simplified and modular building is becoming more common.
PfS will be closed in April 2012 and replaced by the Education Funding Agency, but many staff and most processes will be carried through to the new body.
New funding for school projects
INTERVIEW: David Pigden
College construction work is only just beginning to recover from the fiasco of the Building Colleges for the Future programme.
Scores of colleges were left with stalled schemes after the Learning and Skills Council admitted a £3 billion funding gap on approved projects.
But a chink of light has appeared for many further education institutions with the Skills Funding Agency handing out grants of between £100,000 and £2 million to fund schemes matched with twice as much funding.
“There was a hiatus after the shutters came down on BCF,” says David Pigden, deputy principal at City of Westminster College.
“Things have now moved on a bit and the SFA has invited bids for grant funding that could get some schemes off the ground.”
Some colleges will have projects ready to go with the new funding, while others will take a bit longer to go to market, according to Mr Pigden.
City of Westminster was one of the lucky colleges to get its project completed through BCF.
Mr Pigden said: “The thing I looked for most from a contractor was honesty. Our contractor spoke to us straight throughout the process.”
He said construction contracts would generally be tendered traditionally and use design-and-build structures.
“Colleges will enter their own procurement processes complying with government regulations.”
Local contractors will have opportunities to work on college schemes, Mr Pigden said.
“Knowing the local area and creating jobs in the area can be an advantage,” he said. “Many colleges are looking for apprenticeships to add value to the contract.”
Most importantly, colleges will look for contractors to work closely with them on schemes. “The last thing we would want is someone to say ‘we’ll let you know when it’s finished’.”
(see table, chart and graph)
London has the largest slice of starts on site this year to date, according to data from construction business intelligence unit glenigan, with more than one-fifth of the value of total starts in the capital.
There is less of a divide between the north and south of the country than in other sectors, with the North-west and Yorkshire and the Humber holding their own compared with the South-east and East of England. Lesser activity is occurring in the principalities, with Northern Ireland unsurprisingly limping behind other regions in terms of education starts, accounting for less than 2 per cent of the total UK value.
Glenigan’s outlook for education starts is less than hopeful, with quarterly declines forecast through the next year. The forecast value of starts for Q3 2012 is set to be worth almost 20 per cent less than that seen this year, which had already dropped by 8.8 per cent compared to 2010.
The start of next year is set to be hit the hardest with declines of almost two-thirds stretching across the first six months. By the end of 2012, the value of starts is predicted to be worth just shy of £1.1bn, 11 per cent less than that seen in the fourth quarter of 2010.
The top contractors in the state education sector all appear in the cninsight 100, showing that the larger players in the industry are dominating with more than £2.1bn worth of work so far this year across our top ten. Balfour Beattyand Willmott Dixon lead the charge, with an impressive £631m worth of work between them, though this is made up of almost 100 projects. Two-thirds of the work value across the top ten sits with the top half of the table.
Repairs matched for colour
Contractors working on state education projects work to tight build programmes, exacting quality standards and inflexible budgets so often welcome the help of specialist fine finishers Plastic Surgeon in helping them deliver on all of these areas.
“There are obviously massive cost influences on anything state and education driven,” says Plastic Surgeon managing director Rob Mouser. “We can repair damaged surfaces and fixtures, which is more cost effective and less time consuming than replacing those items.”
Plastic Surgeon has worked on many state education projects and their work ranges from removing scratches from metal doors to repairs to brickwork, cladding and the building envelope. At Parkside Community College the company worked with Morgan Sindallto repair a number of reconstructed sandstone windowsills where they had been chipped when scaffolding was removed. The damaged areas were treated with a bonding agent and then filled back flush with the original profile, while the use of selected aggregates and pigments gave an exact colour match.
“We’ve also found with education projects, particularly schools, that the clients like to use a lot of bright and strong primary colours with windows and door sets that are non-standard. This can provide them with some challenges in terms of finish, which is where we can help,” explains Mr Mouser. Plastic Surgeon’s team of finishers are trained in colour perception and have the ability to blend various pigments by eye then mix paint to repair any damage using the same colour.
For more information visit www.plastic-surgeon.co.uk
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EDUCATION NEWS IN BRIEF
DfE seeks schools head
The Department for Education has begun its search for a head of the schools capital programme to oversee a budget of £4.5 billion in 2012. The £130,000-a-year director of capital role will be part of a reorganisation which will see the Education Funding Agency take on the functions of Partnerships for Schools which is to be wound down in March 2012.
PFI plan to go ahead
The government has confirmed its £2bn schools PFI programme will go to the market in Spring 2012 despite a wide-ranging review of PFI being launched from December. Treasury commercial secretary Lord Sassoon said the procurement process would attempt to learn lessons from the evidence around inefficiency of PFI but that it did not make sense to wait for the right model before starting procurement.
Estate survey begins
Partnerships for Schools has begun a search for building surveyors to determine which schools are most in need of upgrade works under a contract worth up to £30 million. PfS has been employed by the Department for Education to carry out a survey of the entire schools estate of up to 23,000 education buildings.
ROLL CALL: WHO YOU NEED TO KNOW
Ruth Thomson, interim chief executive, Partnerships for Schools
As the delivery body for all government schools capital funding, PfS channels cash for primary, secondary, academy, free school, sixth form and university technical college construction work. The body manages much of this through its £4bn national framework, which consists of 15 contractors vying for individual projects through quick-fire mini competitions. Ms Thompson was appointed interim chief executive of PfS for the period up to the merger with the Young People’s Learning Agency in April 2012 to form the Education Funding Agency.
Peter Lauener, chief executive elect, Education Funding Agency
The EFA will manage the school and sixth form college estate. It will be responsible for the allocation and distribution of approximately £50bn revenue and capital funding each year, as well as the delivery of capital investment in schools. The body will project manage capital projects procured through the academies framework, and deliver project management, support and advice for PFI procurements.
Geoff Russell, chief executive, Skills Funding Agency
As part of its role promoting adult skills, the SFA awards capital grants to further education colleges. After the debacle of the Building Colleges for the Future programme, this system offers colleges an opportunity to get scaled-back schemes off the ground. All 252 FE institutions receive £100,000 as long as they can match it with double this amount. They can bid to extend this to up to £2mon the same basis, creating £6m projects.
Steve Chalke, chief executive, Oasis Community Learning
Founded in 2004 to create schools and community hubs, OCL has opened 14 academies to date, as far afield as Lincolnshire and Croydon. It has a board of directors responsible for the activities of all its academies, which are overseen by a central executive team, led by Mr Chalke.