SUMMARY OF REPORT CONTENTS

Building Schools for the Future (BSF) is the UK Government’s largest single investment programme to improve school buildings and was introduced as part of its commitment to devolve funds to Local Education Authorities (LEAs) and schools to spend on maintaining and improving their school buildings.

BSF is backed by the Department for Education and Skills (DfES) and aims to rebuild or renew every secondary school in England over a 10-15 year period, which equates to around 3,500 schools over a total of 15 waves. Worth £2.2 billion in its first year alone, BSF involves investment in both buildings and Information Communications Technology (ICT). The programme has now also been extended to cover primary schools and will see around 8,900 schools (around 50% of total primary schools) replaced or refurbished by 2020, initially at the cost of an additional £9.4bn over the next three years.

In total, the Government has estimated that BSF will be worth up to £45bn over the next 15 years and is the biggest investment programme within the educational system for over 50 years. Funds are being provided through a combination of the DfES capital budget and the Private Finance Initiative (PFI).

The BSF programme will be one of the most important sources of school capital funding in the future, but only accounts for part of the funding. The government will spend £5.1 billion on school buildings in 2005-06 but the majority share – totalling £2.9 billion – will be spent on projects outside BSF. About £2.9bn is to be spent on the backlog of general repairs and maintenance and the remaining £2.2bn is to be invested in Building Schools for the Future.

There are no precise programme projections for BSF; however the DfES predicts that the first projects will start on site in the second quarter of 2006, with a Government target to build around 380 schools by 2008. However, this target now seems unlikely with no projects having started on site and it is likely that just 157 schools will now be completed by 2008. Preparatory work has begun on waves 2 and 3 of BSF, with waves 4 and 5 expected to be announced in 2006 or 2007, with funding allocations for 2008-09 and 2009-10. The initial number of schools in waves 4 and 5 is estimated to be around 148 and 164 respectively.  At the moment, it is estimated that around 870 schools will be open under BSF by 2013/14 as part of the first 7 waves of the Programme.

Quality design is one of the key issues at the heart of the BSF Programme and is expected to account for a significant part of a bid evaluation. BSF is aiming to provide educational facilities fit for the next 20 to 30 years and designs for new school buildings and major adaptations will need to take account of current and likely future developments in education and technology.

Key drivers for change in schools will also include the impact of a more diverse curriculum, new ways of learning and the impact of ICT, opening up the school to other pupils and the community as a whole, the inclusion of pupils with special educational needs into mainstream schools and the consideration of sustainability, whole life costing and the use of the Government’s BREEAM (Building Research Establishment Environmental Assessment Method) standards for schools, with assessment criteria based on environmental performance levels.

The use of Public Private Partnerships and PFI funding in around 30-50% of the total BSF Programme has led to concern that the well documented problems experienced on many previous PFI projects including high costs, poor quality and late delivery may be transferred to BSF projects. There is also concern about proposals to transfer services, key education decisions and powers from LEAs to LEPs, which include private sector companies and in which LEAs have only a 10% stake.

The Government is also considering using the Local Improvement Finance Trust (LIFT) concept for BSF as established by the DoH for use by the NHS and believes it will help address the problems of PFI refurbishment in schools and reduce construction costs on BSF by around 2% per year through investment in innovation and good design. In April 2003, secondary school projects using LIFT as their model were launched with 4 pilot schemes totalling £290m, in Greenwich and Southwark, Bradford, Bristol and Sheffield

For suppliers and sub-contractors, the BSF programme represents a potentially lucrative market. The increasing use of offsite and modular construction techniques in education projects is creating a significant and valuable market for contractors and has been given strong Government backing as one of the key solutions to delivering the massive construction programmes under the BSF programme, by standardising internal designs and speeding up the process of procurement and construction. The long-term nature of the BSF Programme is creating a significant volume market that makes it worthwhile for contractors to invest in modular and off-site construction facilities. The scale and length of the Programme nationally, anticipated over 10-15 years, is likely to increase the education sector’s share of the prefabricated market, whilst boosting the use of prefabrication techniques in the construction industry as a whole. 

The private sector is showing considerable interest in Building Schools for the Future and there are currently 23 consortia bidding for BSF projects. There is so far a diverse spread of expertise within those consortia, with a general shift away from traditional PFI schools with contractor-led consortia to those more a more balanced representation including ICT and education specialist partners.

These consortia are now openly bidding for work under the BSF Programme. For example, Amey has recently been named preferred bidder on the 10-year £400m Bradford BSF scheme under the IntegratED Bradford Consortium, the £150m Bristol scheme was awarded to Skanska Educational (architects Wilkinson Eyre and Architects Co-Partnership) and the first phase of the Manchester BSF was awarded to a consortium comprising Balfour Beatty, Laing O’Rourke and Aedas Architects.

Other leading consortia currently bidding for BSF work include 21st Century Education (Mill Group/Mott MacDonald); Meridian Education Partnership (Alfred McAlpine); Learning 21 (Costain); Inspired Spaces (Carillion); Paradigm (Taylor Woodrow); Transform Schools (Balfour Beatty); ExcellLearn (Equion, Bank of Scotland) and InspireLearning (Amec).

Leading contractors bidding for work under the BSF Programme include: Balfour Beatty, Carilion, Costain, Galliford Try, HBG, Interserve, Kier, John Laing, Mowlem and Skanska.