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Jim Knight response to the National Audit Office report - Building Schools for the Future.

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12 February 2009

Commenting on the National Audit Office report on Building Schools for the Future programme published today, Schools Minister Jim Knight said:

“Month-by-month, term-by-term BSF is building momentum - with 80 local authorities and nearly a third of all secondary schools now in the programme. The 50th school has now opened, meaning we are ahead of the revised target that 47 will be open by March. And we are fully committed to seeing BSF through to completion so that education standards are transformed in every school across the country. “The second annual independent evaluation of BSF by PriceWaterhouseCoopers last month concluded it has “gathered momentum” in the last year and there has been “significant progress” to improve the efficiency. It found that the vast majority of heads involved think that BSF is the key to improving results and expect it to improve teaching; and as well as giving parents, students and local communities access to wider services. “And it also shows positive feedback from teachers and pupils in four BSF schools up and running - finding that young people are prouder of their schools and the new buildings are raising their aspirations. “Findings in today’s National Audit Office (NAO) report are also encouraging. “It is unequivocal that BSF makes it easier to invest and plan for the long-term - and that the vast majority of local authorities and private contractors say that it is leading to more strategic planning and delivery of school building than previous programmes. “It shows early evidence that the LEP model is leading to faster and more efficient procurement of school building projects, with time and cost savings, as the programme progresses. “It finds that Partnerships for Schools has put effective, skilled management in place to run the national programme and is keeping building costs under control - far beyond anything which local authorities could do on their own. “And it recognises the need for the number of schools in construction and procurement will have to double - we agree, which is why BSF is now accelerating so that by 2011, at least 200 BSF schools will be opening every year, 300 a year under construction and funding accelerating to £3.1 million a year. We expect the vast majority of local authorities to completely finish their projects by 2020, with the remaining ones in the final stages of renewing their estate. “But we acknowledge also, that the NAO identifies a number of other key issues. “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 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 taxpayer’s money - which is why, as the NAO reports, we insisted those first projects took more time to improve their proposals. The NAO reports early evidence that having BSF is leading to time and cost savings on repeat procurements. We expect this to continue thanks to us cutting further planning time by two months and reduce costs by up to 30% - which will save £250m from the total programme costs. “The NAO reports that while the estimated total programme costs have risen, it says prices of BSF buildings have been kept firmly under control thanks to our funding arrangements and management. Moreover, 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. This further investment means no child will miss out from BSF and is integral to transforming the face of education. “And 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. “There are positive signs - BSF projects continue to be signed off with the 29th local authority reaching financial close last week on a £50m PFI deal,; six financial institutions, including new players in BSF, have indicated they are in the market to finance school PFI projects; and we have secured a commitment in principle from the European Investment Bank (EIB) for £300m to support BSF schemes that have PFI investment - which we expect to be approved in the spring. This is alongside our hard work with Treasury and others on alternate and innovative funding models aim to keep private finance available for BSF projects.” Chief Executive of Partnerships for Schools, Tim Byles, said: “We very much welcome the NAO’s report into BSF and in particular their endorsement that this unprecedented programme is now being well managed and that we are keeping costs under control. The report also explicitly recognises that BSF delivers new schools quicker than previous school building programmes and to a higher specification. “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. This is consistent with activity to date in 2009, where three deals have already closed, with the latest being a £50m PFI project in Tameside. This pipeline of activity translates into the continued momentum we see on the ground. With 50 schools now open, we are ahead of our delivery schedule for the current financial year, and to date, no construction works or school openings have been delayed due to the current economic climate. “As with a number of other previous reports into BSF, the NAO also points to some of the challenges that BSF faced in the early days of the programme. Although as the report recognises, these have now been addressed, there is no place for complacency in the leadership and management of a programme of this scale and vision. We have been resolute in our commitment to learn lessons from the early days of BSF and will continue to do so to ensure that at every step we are maximising the impact of taxpayers’ money to deliver the new learning environments that every pupil, teacher and community deserves.”

Editor's Notes This press notice relates to 'England'

The full National Audit Office report The Building Schools for the Future Programme: Renewing The Secondary School Estate is at

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