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PPPs in perspective Primary concerns, by Mark Hellowell

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08 April 2005

Councils broadly welcomed the extension of the Building Schools for the Future investment programme to primaries. But they are concerned about how it will work and how much control they will retain

Chancellor Gordon Brown has decided to broaden his schools investment plan so that primaries as well as secondaries can benefit. It seems a natural enough extension.

Building Schools for the Future is all about the long-term future of education in England. It is set to transform the state of the country's schools by 2021. So it always seemed strange to deny primaries a place in it.

Nevertheless, Brown's Budget announcement came as a surprise to those involved in the programme.

Partnerships for Schools, the government-backed agency that oversees Building Schools for the Future, says it has not yet been briefed on how the chancellor's £9.4bn of investment for primary schools will be linked into the wider initiative.

PfS chief executive David Goldstone acknowledges that a primary school link-up is 'a possibility' but says his team has yet to discuss the practicalities with the Department for Education and Skills.

Under the secondary schools programme, funding is allocated largely according to social deprivation, so poorer areas receive money first. Wealthier areas might not receive funds until the middle of the next decade. That has proved controversial, and the government might not want to face down Home County local authorities over the primaries element.

Another option would be to give responsibility for funding to the planned local education partnerships between councils, the private sector and the PfS — the 'delivery vehicles' for Building Schools for the Future.

James Stewart, chief executive of Partnerships UK, the pseudo-private agency that jointly owns PfS with the DfES, says he would welcome this. 'When the money does come through in 2007/08, there will be LEPs in existence, and I would like to think they will play some part in delivering the investment programme.'

Much will depend on the health of the existing secondary schools programme. The progress of Building Schools for the Future has not been quite as swift — or as smooth — as the government hoped.

All bids are now in from England's local authorities. A total of 20 in the second and third waves of the programme will develop £4.4bn of projects, aiming to reach financial close in 2006/07 and 2007/08.

This is in addition to the 16 pathfinder and first-wave authorities due to sign up to £2.2bn of schemes in 2005/06. So about a quarter of the UK's councils are now formally linked into the programme.

But not everybody is happy about what PfS is asking them to do. In particular, councils are concerned that the plans are not affordable and require too much support. They also fear that LEPs would dilute local accountability over education policy.

Knowsley Metropolitan Borough Council is one of the first wave councils. Steve Mumby, speaking before he left his post as the council's director of education, said: 'We do not have an LEP, nor do we intend to have one.'

Other councils are eschewing the LEP model in favour of tried and tested Private Finance Initiative schemes.

For authorities experienced in large procurements, many of which are part of the first three waves, there seems to be little reason to adopt the complex LEP model. Stoke-on-Trent City Council, for example, has been given PfS's backing to proceed on this basis.

For its part, PfS insists there is no difference of opinion between the bulk of councils and officials at the centre. Goldstone says the LEP model was designed for projects that need to be delivered in phases over a prolonged period, using both the PFI and conventional capital funding.

'There are authorities where those circumstances do not apply — where there are clearly defined investment requirements that can be delivered through one procurement and one contract, not requiring a long-term strategic relationship,' he says.

Industry professionals comment that resistance to the LEP model will abate as the programme develops.

The majority of councils in the first wave have unusually strong procurement teams. That, along with the social deprivation levels in their areas, is why they have been chosen.

As Building Schools for the Future rolls forward, less competent and less confident teams will become the norm, and the dilution of local decision-making power will be more acceptable if the result is more efficient procurement.

So James Stewart's prediction of a primary schools programme delivered in large part by LEPs could be realised after all.

Mark Hellowell is editor of Public Private Finance

PFapr2005

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