Feeds

Credit crunch hits school rebuilding programme

The new abacuses are here kids...

Next gen security for virtualised datacentres

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.

The essential guide to IT transformation

More from The Register

next story
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
Redmond resists order to hand over overseas email
Court wanted peek as related to US investigation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
NZ Justice Minister scalped as hacker leaks emails
Grab your popcorn: Subterfuge and slur disrupts election run up
We need less U.S. in our WWW – Euro digital chief Steelie Neelie
EC moves to shift status quo at Internet Governance Forum
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
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?