Feeds

Credit crunch hits school rebuilding programme

The new abacuses are here kids...

Website security in corporate America

The National Audit Office says councils are struggling to borrow money under the Private Finance Initiative to build schools fitted with new ICT

In a report on Building Schools for the Future (BSF), the programme to rebuild secondary schools and equip them with the latest technology, the NAO says that during 2008 problems in the banking sector reduced the money available to lend.

Of the £45bn predicted total spend on BSF, 10% will be allocated for new technology. As a result of the credit crunch, however, it has become increasingly difficult for local authorities to find lenders for the PFI deals used for BSF.

In October 2008 Kent CC was the last local authority to agree a PFI contract for its BSF programme. LB Newham intended to use the PFI to build two schools when it established a Local Education Partnership (LEP) between itself, a construction company and an ICT supplier in January 2009, but had to use conventional funding instead.

The report says that BSF projects already under way have not been delayed because of the economic conditions, but the extent to which problems in the finance markets will affect BSF is unclear.

"The Department for Children, Schools and Families and Partnerships for Schools (PfS) are in active discussion with banks and other potential lenders and believe that BSF remains one of the more attractive markets for bidders," says the NAO.

"PfS has secured commitment in principle from the European Investment Bank for £300m of investment in the senior debt of BSF PFI projects."

The NAO also found that the department and PfS, the agency responsible for the programme, were "overly optimistic" in their assumptions of how quickly the first high tech schools could be delivered. In February 2008 the department said it wanted to build 200 schools, but only 42 were delivered.

The NAO also found that there are fewer active ICT contractors than construction contractors in the programme. When forming new consortia to bid for projects, construction contractors compete for ICT contractors who have already won bids elsewhere, the report says.

Capital costs have increased by between 16% and 23%, and the cost of establishing LEPs has been high. In the first 15 LEPs, the total cost of designing schools, procuring a private sector partner and setting up the LEP averaged between £9m and £10m. This was due to delays, reliance on consultants, large numbers of sample schemes and alterations to standardised documents.

The NAO says that its report focuses on procurement because it is too early to measure how effective BSF has been in improving education. It calls on PfS to speed up its collection of cost information on BSF schools, including procurement, ICT life cycle costs and PFI contract variation costs.

Tim Burr, the chief auditor, said: "Building Schools for the Future is a highly ambitious programme. Converting that ambition to reality requires robust planning, close cost control and making a success of complex long term partnerships.

"Partnerships for Schools and the department were too optimistic in their early plans, though programme management has since improved. But it remains a real challenge, in difficult market conditions, to deliver the 250 schools a year that will be needed, to include all schools by 2020 as currently planned."

This story was originally published at KableNet

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

Internet Security Threat Report 2014

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.