03 June 2005
Construction costs on the government's £25bn schools infrastructure programme could easily be cut to release more than £200m for frontline services, James Stewart has told Public Finance.
The chief executive of Partnerships UK is overseeing the Building Schools for the Future programme, intended to refurbish or rebuild all schools across the country.
Stewart said the support being provided to local education authorities by PUK and its delivery vehicle Partnerships for Schools, through the use of standardised documents and negotiating advice, would allow significant efficiency gains.
'Construction inflation is running at a high rate. If, by managing its effects from the centre and encouraging the private sector to invest, we can drive it down, the numbers become very compelling,' he told PF.
'It's around 7% at the moment, it is certainly not an over-ambitious target to get it down by 1% per annum.'
If such a target were achieved, the 15-year programme would generate savings of more than £200m, which LEAs and schools could then invest in education services.
A similar project, Lift – Local Improvement Finance Trusts – operates in the health sector to provide new primary care facilities. A recent report from the National Audit Office concluded that the scheme was performing well.
Stewart said that in the health sector, fears that such a large government-sponsored investment programme would lead to a few big private contractors dominating the market had proved unfounded. He said he was confident that the BSF programme would be similarly competitive.
'In health, what has happened is that a number of companies are players on a national basis while some of the smaller companies have focused their efforts on a regional basis,' he said. 'In education, what we want to emerge at the outset is a healthy interest and competition among companies. And so far, so good: the first few deals have more than ten companies bidding on schemes.'
Stewart added that the drive to build 'value and efficiency' into the whole life of the contracts was the main objective of the BSF programme.
PFjun2005
