Oral evidence: Priority Schools Building Programme, HC 1090Wednesday 18 March 2015
Oral evidence, 18 March 2015.
Witness
Rt Hon David Laws MP, Minister for Schools, gave evidence.
Chair
Good morning, Minister.
Mr Laws
Good morning. It is good to be with you, Chairman.
Chair
It is a pleasure to have you here. You are the last Minister to appear before us in this Parliament.
Mr Laws
Great.
Chair
And you have been in the Department for some time now. We have limited time though, so we will concentrate on the Priority School Building Programme. How fit for purpose is the overall scheme of things? James suggested we have one pot. We have heard today about different pots and the difficulty of seeing the future and therefore making rational decisions based on an understanding of the money that is likely to be available. Even the money that is available is split into so many pots that you would have to be a bit of a genius to get your head round it all and properly predict what you are going to get and when. Is that a fair characterisation or not?
Mr Laws
I don’t think so. I am very proud of what we have done over this Parliament on the school capital programme. In your discussions, you have reflected a bit on how we have changed things from the previous Parliament. I do not want to look backwards too much. I am sure that you do not either, but reflect on the fact that in the previous Parliament we had a capital programme, particularly in relation to Building Schools for the Future, that was very slow-moving and bureaucratic compared with the existing system. It was extremely expensive, which meant that we could do only a smaller number of schools. I am sure that you will want to come back to that particular issue. It was not, quite strikingly—you picked up on this earlier—related to condition need. We were not sending money to the schools that needed the money most. We have changed all of those things. We have done that not only in our central programmes—the Priority School Building Programme 1 and 2—but also, through the Property Data Survey, ensured that in future, allocations of maintenance money to a local authority level will follow need and not simply pupil numbers. We need to reflect on the fact that it is not just the central programmes that were badly structured under previous Governments. It is also that the allocations to local authorities and local schools seemed to bear no relationship whatever to need because we did not have an idea of what the different needs of the school building stock were across the country. This is a really good news story. I am pleased that you are scrutinising it and we will learn whatever lessons we can, but I am very proud of what the Government have achieved in this area.
Chair
Thank you. So you have the survey of the school buildings. Are you planning to do another one? Originally, you were going to do it as a five-year rolling programme and then it was brought forward and done a little more quickly. Would it not make sense to have a plan to renew this over time? I would have thought, notwithstanding your positive answer just now, that you would tend to streamline the funding behind it, so you have a very well informed, planned, updated picture. David Simmonds talked about the fact that no sooner have you finished it, it is out of date. Perhaps you could reflect on that. What does a rational system look like so we do not get wasteful and so that we do not go for years failing to invest in our buildings—save a penny now and spend a pound later as a result—or get involved in crazy expenditures that are not linked to the basic needs of the building?
Mr Laws
I think a rational system has to have a number of components. First, there needs to be long-term planning. I am pleased that we had an allocation of capital from the Treasury at the last spending review for a six-year period, right up to 2020-21. We have now, as you know, moved to basic need allocations for three years and maintenance allocations for three years. Long-term planning is important. Allocating the money in an evidence-based way, preferably on the basis of need, rather than some other factor is incredibly important. We have to ensure that we have a mechanism to continue to update that in the future. We have to decide whether that should be on the basis of locally-commissioned work or nationally. We have to ensure that, in doing that, we do not create incentives for parts of the country to under-invest in their school building stock and then be bailed out by national Government.
Chair
How do you get that balance right? You do not want to create that perverse incentive, but we know that it is not always just incentives. Some people are just not very good at it.
Mr Laws
I think that we have made clear that, in future, we will have much more transparency around what local authorities are doing in terms of their basic need funding, how expensive each school place is, and their maintenance funding—what they are spending it on and whether they are spending it in full. It would be open to a future Government looking at the way that maintenance funding was used by a local authority to decide that, if it had neglected the maintenance of its school building—for example, if it had been allocated £10 million for maintenance and only spent £2 million—that could be taken into account in future allocations. The other thing that I think a logical—
Chair
I want to stop you again. You talk about local authorities. Of course, 60% of secondary schools are now academies. For primaries, that is growing all the time. How does it work across—you still have a minority but not far off half of academies are stand-alone institutions so you are relying on their ability to understand their stuff when some local authorities have failed so miserably. How will it work for academies? How will you have a system that effectively channels them to do the right thing?
Mr Laws
In two ways. First, where there are groups of academies, it makes sense to devolve above a certain number of academies to the groups, rather than to individual schools. We have done that, as you will know, in the maintenance allocations this year. Single-standing institutions have to be able to bid to a central pot because it would not be sensible to try to allocate individually. Also, there is a case for having a national programme such as the Priority School Building Programme 1, 2 and successors. There are two reasons for that. First, we really do believe that the evidence shows that when you manage these things centrally and can have a standard procurement and batch schools up, you get a much better financial deal. Commenting on the end of your earlier discussion, the data we have show that the pound per square metre of these buildings compared with Building Schools for the Future is about 35% on average less, which is an enormous saving. The other thing we have to bear in mind is that sometimes we are talking about local authorities or groups of academies that are quite small—they are not a Kent or Hampshire—and there are occasions where, instead of just having maintenance money and rebuilding bits of schools, it is far more rational to knock down an entire school and rebuild it from scratch. There are some local authorities and academy groups that simply do not have the budgets devolved from central maintenance to be able to do that. We think any future Government will want to have some kind of central programme that is efficient and cost-effective and can do those really lumpy school-building projects that we are trying to do in PSPB 1 and 2. It would be mad for us to try to control from Westminster and Whitehall the maintenance budgets for every single one of 24,000 schools. That is why we have to have a logical system to devolve below those national programmes.
Chair
So what about that stand-alone school?
Mr Laws
That stand-alone school will still have to bid into a central pot. We have got the condition improvement fund. I should say to the Committee that we expect to make a further allocation of money through the condition improvement fund to hundreds of schools before the Dissolution of Parliament, over the next week or so. Obviously, there comes a level where you have to be able to do that to individual schools and that is being done by the EFA.
Chair
Take a small secondary school that does not want to grow but does quite a good job educationally. It may not have done historically, it may be in a poor condition now, and not have the expertise to do a particularly good job going forward. How do we get the balance between the madness of trying to do their maintenance from Whitehall and the madness of expecting them to be really good at property, when they are not?
Mr Laws
What we have discovered since the academies programme was established is that even individual academies have become increasingly professional in the management of their estate. The number of bids we get to the academies capital maintenance fund and now the condition improvement fund is very high and very high quality. That also shows that the vast majority of schools concentrate on things that are crucial for maintaining the school building stock but are not always the sort of sexy, prestige projects. A huge number of the projects that come in through that are for replacing poor-quality roofs and boilers and so forth. Those individual schools are showing responsibility and skill in managing their own estate.
Chair
Has a market developed for people to provide that service to them? Because some just won’t be very good at it.
Mr Laws
Yes. A market has certainly developed. There are people out there who are very keen to give advice to schools on these issues. They are keen to win business in a competitive environment and to advise schools on how to present their bids to us. That means that we have to ensure that our scrutiny is very high quality as well.
Bill Esterson
How much does that advice cost?
Mr Laws
I don’t have a figure for what that advice would cost, because that is procured by each individual school, but it will be very small in relation to the overall savings that we are driving across our capital programme.
Bill Esterson
Don’t you think it would be a good idea to work out whether that is a good use of money for stand-alone schools with scarce resources, compared with a more collective approach to the process?
Mr Laws
It would be very difficult to do that, because you would have to survey thousands of schools. We know that those costs are really pretty small.
Bill Esterson
You don’t know how much they are.
Mr Laws
I don’t have a figure to give you today.
Bill Esterson
How do you know they are small?
Mr Laws
Because the costs you are talking about for an individual school are not particularly high. They will run into very low figures in relation to overall school budgets. Rather than try to pick a figure from the air, if you want me to send the Committee a note giving estimates of those costs, I would be happy to do so. I would say that my experience as a Minister and local MP—and I suspect yours as MPs—is that often individual schools are more imaginative about the management of their estate and assets than is sometimes the case where you have a local authority managing a vast number of schools with limited personnel resource focusing only on those that are in the worst condition. There are lots of individual schools, including academies, coming up with really quite innovative ways of using their estate that would have been passed over in a situation where they were reliant upon just local authority officers.
Bill Esterson
So for those schools to take advantage of that situation, there needs to be a larger amount of capital available, doesn’t there? David Simmonds made the point that capital is very cheap at the moment. Do you think the time has come for a much bigger school building programme?
Mr Laws
You will say, “You would say this, wouldn’t you?”, but I actually think that the size of the school building programme that we have in this Parliament is extremely well judged. In historical terms, the amount of capital that we have allocated over this Parliament compared with, for example, the first two terms of the last Labour Government, is considerably higher—£18 billion over the whole of the Parliament. We are not allocating at the same rate that the last Government did in its last few years, where we had this very expensive BSF programme, but we have a very generous budget not only for maintenance but for basic need. As you know, we have built 450,000 additional school places with that money since 2010. We have this very impressive programme to maintain and improve schools. We have over 500 schools in PSBP 1 and 2. We need to continue a capital programme of that type in the future, for both maintenance and basic need, given the pressures on school places.
Bill Esterson
My question was: do we need a much larger programme? There are schools crying out for this kind of investment, the rebuild that you referred to often being no small part of that. Do you think that the time is right, given how cheap money is at the moment, to expand this?
Mr Laws
I think that it is clearly a good time to be investing. It has been over the last few years, when the construction industry has been very weak. The economy is now picking up considerably, and the construction industry is picking up with it. It is a good time to invest, and any Minister responsible for the school estate is going to want as much money as possible. But do I think we have a good capital programme at the moment? Yes, I do. I would never turn away money from the Treasury, but I think they have given us a good settlement out of 2020-21.
Bill Esterson
You have talked about the basic need money a few times. Why did you use that money on free schools in areas of surplus places instead of on one of your pet projects, which is universal infant free school meals? There are still many, many schools that do not have adequate cooking facilities on site.
Mr Laws
No, I think we have come up with a very good amount of capital for universal infant free school meals. We will have to wait and see what other announcements are made before the end of the Parliament, but we will have allocated almost £200 million for kitchen capital. In addition, the money that we give to schools and that schools can bid for through the capital improvement fund—what was the academies capital maintenance fund—and the money that we have devolved to local authorities is regarded as money that could and should be drawn on for these purposes. That is what local authorities and schools would do in the past. We recently allocated £4.2 billion of maintenance money to local authorities for the next three years. As well as the almost £200 million they have specifically for kitchen and dining facilities, they could and should draw down on that money if they think they need more. But I think we have had a good settlement from the Treasury on the universal free school meals.
Bill Esterson
There are still a hell of a lot of schools that did not get the capital. No schools in my borough were awarded capital. No schools in Knowsley, Liverpool or Lancashire were, either. Those are all the immediate neighbouring boroughs.
Mr Laws
I think you are talking about the latest bidding round.
Bill Esterson
That’s right. No school in my borough has had any money at all from Government for this programme. They pointed out that it was odd that schools in the Prime Minister’s constituency and in the Secretary of State’s constituency were awarded money for these things. The area I am talking about is far more deprived. How does that work?
Mr Laws
Well, let me say two things. First, the £150 million for universal infant free school meals capital was allocated—indeed, we were criticised on this by some people—in an entirely fair and heavily pupil-driven way across the whole country. Your local authority would have got some of that, as well as every other local authority. The local authority then determined its own priorities. We then had an additional fund of money—almost £25 million—to allocate to local authorities through the condition improvement fund, which is a bid-based scheme. Those bids have been assessed by officials. Let me absolutely assure you that Ministers accept—and scrutinise, of course—the calm, rational, measured and non-political advice that comes from officials. We don’t pick kitchens or dining halls to do on the basis of who happens to be the local MP.
Chair
If we could return to PSBP.
Bill Esterson
Absolutely, Chairman. But before we do, the other point put to me is that there is great concern that parents are not now applying for free school meals because of the universal free school meals policy, which is hitting the most deprived areas really badly. I am sure you are aware of that. What are you doing to address it?
Chair
I think the question is clear.
Mr Laws
Briefly, we are following the excellent advice of the previous Government. You will know that the previous Labour Secretary of State established pilots for free school meals in a number of places, which showed that there was not a material drop-off in registrations for free school meals. The medium-term answer, which we are looking at actively now, and which is a good thing to do regardless of the universal infant free school meals, is to move to an automatic data-sharing arrangement. Instead of schools having to collect information on entitlement, which was a problem well before universal infant free school meals, there will be an automatic data transfer, so every single school will know exactly what the entitlement is without the nonsense of having to register.
Bill Esterson
And you are going to bring that in straight away?
Mr Laws
No, it requires legislation on data sharing. We have no idea who the next Government will be, but my strong recommendation to whoever is in the next Government is to have a data-sharing Bill and to bring forward measures that would allow the Government to do that.
Chair
If a coalition exactly the same as the one now were in government on 8 May, when could it be brought in?
Mr Laws
I think it could be brought in any time from the autumn of 2016 onwards, but we are doing more detailed work on exact time scales. I would not want to make that a final commitment, but I think it could be done quite quickly.
Chair
Potentially the end of 2016.
Mr Laws
That would be the earliest date, but it is not years and years.
Bill Esterson
Back to the subject at hand—PSBP. We have heard concerns, some of which we heard in the previous session, about the fact that although the current programme is delivering in terms of build quality, it may not be as good in terms of educational provision. As the Association of School and College Leaders said, it does not always meet the specific needs of individual schools. What is more important—providing improved educational environments or delivering school buildings as cheaply as possible?
Mr Laws
I think it is possible to do both, first, because our procurement is much more efficient, not just more timely, than the predecessor scheme, Building Schools for the Future. We are also not building what the Chairman described as, in some cases, almost palaces, with enormous entrance halls. They are great and lovely to have, but every time you build a school for £40 million or £45 million, you are not able to afford a school that should cost £15 million. Some of the BSF schools cost as much as £45 million. Secondary schools cost on average about £20 million. We are building, even all these years into the future, at about £15 million per secondary school. That has got to make sense. All the feedback I am getting from schools about the quality of the final product is very complimentary. I can pass on to the Select Committee the comments of lots of head teachers and governing bodies across the country that are really pleased with what they are getting. We are not building low-quality schools that are going to fall down in five years’ time. We are not compromising on quality, but we are driving down the price and getting very good value for money out of it.
Bill Esterson
Do you take on board the point Andrew Seager was making to us, which is that in his experience and that of other schools, there are still long-term problems? This is only a partial solution, and the schools themselves are going to have to deal with financial commitments as a result. It is not a comprehensive solution, for want of a better description.
Mr Laws
No, I don’t think that is quite right. First, I don’t think his school, the Stratford School Academy, is representative of the experience of the overwhelming majority of schools going through this programme.
Chair
Do you have data on that? We have heard anecdotes, and you have just given us some more. Do you have any quantitative data to back up the fact that head teachers for the most part are more with André than Andrew?
Mr Laws
I certainly have lots of quotes provided to me by officials of all the nice things that head teachers have said. I certainly have statistics on the build costs and the time scales. Obviously, when you are reliant on a qualitative judgment about an experience, you can do that only through the comments that people make. I can try to collect those and pass them on to you.
Chair
You could do a survey and ask them to tick whether they are very happy, happy, neither, unhappy or whatever. It is not that difficult. You’d think that having spent millions building it, you might bother to ask the guy concerned what he thought.
Mr Laws
I would be very happy to look into whether we should be formalising it. We are very confident that the feedback would be good. I should say—and put clearly on the record—that Andrew’s project, the Stratford School Academy, has probably been, according to our experts, the most difficult project to deliver in the whole PSBP. There have been very complex site issues, some contractor issues that I can’t go into entirely in this forum, and there have been some disagreements with the school over aspects of the project. On the aspects of the project issue that you touched on, let me be clear what the principle is. The principle is, particularly when we need to rebuild an entire school or large parts, that we want to go in and do it properly and leave the school with a high-quality product. Understandably, a school that is being completely rebuilt will try to get things upgraded that might be there, but it would like better. You would like things better in the outside area and you would like to have every piece of furniture automatically replaced, rather than have to recycle some of the old furniture. That is not necessarily good value for money.
Bill Esterson
Hang on. I accept the point about cathedrals that you and the Chairman have been keen to make. However, isn’t it important that everything works and is in place, with things such as IT and the physical environment, and that an holistic approach is taken? It is important with a project like that that you don’t leave things for later. Don’t you accept that?
Mr Laws
It is certainly important that the quality is very high and that we do not leave new buildings with imperfections that should be addressed. It is certainly important that necessary things outside the building should be done. I am told that we probably spent about 12% of the budget on PSBP 1 on things that are outside the school building. It is not true that we just rebuild a school and leave the area around it in a mess. There is an issue on value for money. I am not talking about Andrew’s school in particular. If you’ve got a school that has 200 computers that could transfer perfectly sensibly to the new school, but the school would like them all to be new, there is an issue for us about value for money. What we do not want is for this to be a wasteful programme and go back to some of the wastefulness of the past. We have to make a judgment about what we think are reasonable and unreasonable demands.
Bill Esterson
So, in order to achieve that value for money, is it not better to ensure, if you have a limited pot, that you proceed with care? That is a different point from the one I made earlier about expanding the pot. Should you not ensure that every project is completed and that you make the most of it by being thorough?
Mr Laws
Absolutely. Let me correct something that I think David Simmonds said about things that we find when we start a project. We do obviously contract with the contractors to a price to rebuild a school. But if we find more asbestos in it than everybody thought there was when the school was about to be built, we don’t leave that cost with the school. We either pay it ourselves and increase the contract price or, if we think the contractor has not done their job by assessing the cost when they took on the project, we negotiate with them to pay those costs. We definitely do not leave that type of cost with individual schools or local authorities.
Mr Ward
May I bring forward a question that I think would fit here, David? You were talking about anecdotal evidence that they had had a good experience. We have an opportunity to learn formally from PSBP 1 in order to improve PSBP 2. Where is that analysis of the learning taking place, so we can improve as we go through this?
Mr Laws
It will certainly be informed by any reflections from your Committee. It is reflected through the feedback that we get from schools involved in this. I would be happy to send the Committee a note on this if it would be useful for your report.
Chair
We are not doing a report.
Mr Laws
Oh, sorry. There is a whole series of differences between PSBP 1 and PSBP 2, which we have already tested out in some cases. Just one of those is the way that we have ensured that PSBP 2 can pick out individuals parts—individual blocks—and resolve those. PSBP 1 was a sort of take it or leave it thing where sometimes, buildings in really bad condition got overlooked because they were part of an estate that, as a whole, was not too bad. As a consequence, we have reformed PSBP 2 so that it can target individual blocks. We are trying to learn the lessons of PSBP 1 and ensure that all these things get more efficient in the future. We are trying to do that for Basic Need as well, where each allocation is more scientific.
Chair
The problem with the evaluation is that you say you are very proud of it—if it is delivering as you have suggested, you should be—and yet you have not done an evaluation of the head teachers. Then, we would know whether Andrew or André was the average person, and you would be able to sit there and say that 98% say x, y, z. Have you really not done an evaluation? All this money—billions—and we have not done an evaluation that tells us even what the people in the schools think of it afterwards. It seems extraordinary to me.
Mr Laws
Well, I have just been passed a note.
Chair
I was hoping that some information from behind might come your way.
Mr Laws
It says that we are doing a customer survey. I have not received a note to say precisely when, but I will definitely let you know when. I hope that we will publish all of that.
Mr Ward
You are now.
Mr Laws
But apparently we are doing it anyway.
Chair
It is fair to say that only 19 or whatever have actually opened so far, so perhaps it is early days.
Mr Laws
Yes. Just to clarify, on the progress of PSBP 1, we have 19 open, 60 under construction and 82 construction contracts have been signed. The vast majority of these schools we are expecting—in contrast to what David suggested—to be delivered on time. We brought the timing of this forward from 2019 to the end of 2017. There are a very tiny number of schools with specific issues that necessarily are going to cause small delays of an almost unavoidable nature, but that is a tiny, single digit number out of a 260-school programme. There has been an astonishing reduction in cost and pre-procurement time, which has been reduced by 44 weeks for schools procured under PSBP 1 versus BSF. The typical procurement time itself—procurement rather than pre-procurement—has been reduced by 64 weeks. We are now building these two years faster than the BSF schools.
Chair
Excellent. Thank you.
Alex Cunningham
Minister, it was an extraordinary statement from David Simmonds to suggest that 50% of the schools are not on target if, as you suggest, they most certainly are. What information do you have to confirm the figures that you have given, which are totally contrary to what he suggested to the Committee an hour ago?
Mr Laws
In fairness to David, he does not have the detailed information that we have in the Department, where we are tracking and monitoring the progress of every single one of these schools. We know, school by school, precisely what the circumstances are. We are very confident that the vast, overwhelming majority of these things are on track. Indeed, as I said, we brought the delivery date forward from the original announcement by two years. There are a tiny number of schools where there are problems, where, for example, there may be a desire by the local authority to have some major structural reform of its school system, where they actually do not know whether they want the school that we granted them on the same site or whether they are going to do mergers. We have once school up in Runcorn where there is an HSE issue about the school being in a particular zone and, therefore, there are issues about whether we can rebuild the school on the same site. There are a tiny number of projects with individual problems, which are not, I think, the fault of the EFA.
Alex Cunningham
David is speaking on behalf of the LGA and that is the impression that he has. Maybe a little more transparency about what is actually happening and more information sharing with the LGA would be helpful.
Mr Laws
I would be happy to do that and I would be happy to write to David to correct the evidence that he gave to the Committee today, which I was not very happy with and which is not accurate.
Chair
Okay. Talking about corrections, at the end of your brief, three-page submission to us it says, “Typically pre-procurement time has been reduced by 44 weeks for schools procured under PSBP compared with BSF timescales and pre-procurement time has been reduced by 64 weeks.”
Mr Laws
Yes.
Chair
So, “Typically pre-procurement time has been reduced by 44 weeks…and pre-procurement time has been reduced by 64 weeks”. I could not make head or tail of that sentence, unless it was supposed to be that procurement time overall has been reduced by 64 weeks. It is probably a typographical error, or I am being stupid, but I couldn’t understand it.
Mr Laws
We have reduced both the pre-procurement time—the planning and preparation time—and the procurement time itself.
Chair
But it says “pre-procurement” twice.
Mr Laws
I’m sorry.
Chair
It says, “Typically pre-procurement time has been reduced by 44 weeks…and pre-procurement time has been reduced by 64 weeks.”
Mr Laws
Chairman, I do apologise. The second of those—the reduction by 64 weeks—should say “procurement time”. That is a mistake in my note. I’m sorry about that.
Chair
Thank you.
Craig Whittaker
Good morning, Minister. We have heard that St Leonard’s in Durham say that the Property Data Survey listed several of their blocks as having lifts, for example. In fact, they have zero. We heard that the PDS made judgments about their roofs, when in fact no inspection of roofs took place. We heard from Durham county council, which raised concerns that the Property Data Survey in their schools did not take place before PSBP 2 applications were made. Does the Property Data Survey provide an accurate picture of the condition of school buildings?
Mr Laws
It provides a very good picture, but it was never designed to be a perfect statement of the condition of every single building in the country. To do that, as one of your earlier witnesses mentioned, we would need to go in and do very invasive surveys that would be far more expensive and far more time-consuming, and even then would probably not tell us everything about individual schools. What the Property Data Survey was intended to do was give us the first proper snapshot of the condition of the entire estate, to signpost us to some of the schools in the worst condition—particularly so that we could get to those schools more easily than before through the central programmes like PSBP 1 and 2—and to inform an allocation at a local authority or academy chain level that, instead of being based simply on the numbers of pupils, would be based upon the condition need. It is sensible to use that Property Data Survey where you have a large number of schools and it is capturing the overall condition need of a large number of entities. That is not the same as saying that it is a perfect, detailed survey of every single institution. That is why, for PSBP 2, once we had identified some of the worst schools, we made sure that part of the bidding process was that individual schools could check their Property Data Survey. We sent the surveys out to them and said, “What do you think of this?” Many of them came back to us with corrections. We looked at them again and improved some of the things we got wrong. We also allowed in the Priority School Building Programme 2, as I think you know, schools and local authorities to come to us and say, “As well as the Property Data Survey, which is non-intrusive, here are a whole series of other problems that our school has got that you might not have picked up in the survey.” We evaluated that before we did the Priority School Building Programme 2 ranking. We did not simply say, “This is a highish-level survey; we’re not going to look at other data.” We looked at both when determining PSBP 2.
Craig Whittaker
Okay. Let me just challenge you on the Property Data Survey. If we are going to do the visual surveys, which I think is what you said to me last week, can we compare it to the cheap mortgage drive-by valuations that were done with some of the banks and put us in the mess we’re in, or are we talking more detailed visuals than that?
Mr Laws
We are talking more detailed visuals than that. Again, if you want me to send a detailed summary of exactly what all the inspectors have been asked to do, I will definitely do that. As one of your earlier witnesses said, this sits between what you would describe as a sort of drive-by thing, which certainly would not be fit for purpose, where someone just turns up for 10 minutes, looks around and doodles a number down—it is not that type of thing. But it is not going in for days and days and drilling into every wall to see whether there is asbestos there. To do that for 20,000 schools would be incredibly expensive and time-consuming, and it would also run the risk of causing problems for schools if we have people going round drilling into walls on a random basis. So it sits between a very detailed and a very high level.
Craig Whittaker
You mentioned that schools have been able to challenge that. We have received evidence that states clearly that, when schools have challenged inaccuracies, they have been told that those inaccuracies cannot be changed. What is the process for schools if they disagree with a property data survey?
Mr Laws
We gave a period of time for local authorities and other entities to make appeals after we gave them their property data survey, and we received a reasonable number of representations. A hundred surveys have received a data amendment, and 84 education establishments were resurveyed after we received representations from them. That was before we locked down the allocations in PSBP 2, so I can confirm the exact time period for you, but once we completed most of the property data surveys. Before the allocations were made on the basis of that, we sent out those surveys to make sure that there could be a quality- assurance process and feedback. We then changed the information where we thought we might have got it wrong.
Craig Whittaker
So you have changed 100 of the surveys. Sorry, did you say that a 100 of the 19,000 schools that were—
Mr Laws
As a result of representations, 100 surveys have received a data amendment, and 84 education establishments were resurveyed.
Craig Whittaker
So, of the 19,000 schools surveyed, that represents about a half of 1%. Is that right? One in 20?
Mr Laws
It is a very small proportion. I would have to re-check this, but I think that a large number of entities were very happy with the property data surveys. They also understood that we were not trying to capture perfectly, to 100% quality, the survey that you would need if you were going to rebuild a school from top to toe. Our survey would not have those invasive characteristics. We were conducting those surveys so that we could have a central programme, PSBP 2, but also have the means so that we could check the individual things that schools raised with us and apply a formula allocation to the country. Provided that those PDS surveys are accurate and consistent across the country, which they are, it means that we have much fairer allocations to different parts of the country, on the basis of need and not simply on pupil numbers, according to which we allocated in the past.
Craig Whittaker
So how can you say that can be based on need if you are not considering the structural part of the building? In a lot of these cases, you can put a lick of paint over an old crack, or put some wallpaper over it, but that does not mean that the crack disappears. How can you say that what you have described represents a fair process of allocating on need?
Mr Laws
It is a fair basis, because where we thought that there was a material consideration that was inaccurate about the PDS, we went back and checked it. We then simply had to accept that if we were not going to do invasive surveys for every single school in the country, with all of the attendant cost and complexity, providing that we were allocating the non-PSBP capital through the three-year maintenance allocations to collections of schools and local authorities, or chains, any issues in individual schools that may be of greater need than that represented by the PDS would be able to be dealt with out of those central allocations. The only alternative to that would have been to have had incredibly invasive and very expensive surveys of 20,000 institutions.
Neil Carmichael
Following on from Craig’s theme, and in parallel to our discussion in the Chamber last week about school funding, what can the Department do to improve the confidence in the allocation formula, given that it does not seem to be as transparent as some would like?
Mr Laws
For maintenance funding?
Neil Carmichael
Yes.
Mr Laws
I think that the new allocation methodologies that we have both for basic need and for maintenance are leagues ahead of past measures in terms of transparency and quality. Frankly, in the past, previous Governments allocated for basic need and maintenance on an entirely unscientific way. In the case of basic need, they did not take into account the number of surplus places, even when allocations were made. Prior to 2010, no account was taken of whether parts of the country had higher needs than others when maintenance allocations were made; it was just done on the basis of number schools and pupils. That was a really crude way of allocating, and we are now very transparent about our methods when allocating for basic need and for maintenance. We are allocating for longer periods than before in a more scientific way, but we are going on learning. Even in the basic need allocations that we made a couple of months ago, we amended them to reflect some the concerns that had been raised by local authorities for the last round. We are moving from a totally unsatisfactory means of capital allocation, which was not fit for purpose, used in the last Parliament to a really excellent and transparent way of allocating, but we will go on trying to improve it.
Neil Carmichael
Are you worrying about the level and quality of information from local authorities in terms of such allocations?
Mr Laws
Yes. There is a problem that in the past, we used to allocate to local authorities both for basic need and for maintenance, and because Governments thought that it was a good thing that there was local discretion, we basically sent the money off without really finding out what was happening to it, so there was not a discipline for local authorities to be efficient. There wasn’t transparency to know whether they were funding new places or doing maintenance more efficiently than in other parts of the country. Now we are publishing reports both for basic need and for maintenance. We will publish local authority-by-local authority reports annually, showing how much money they have for their needs in both areas, how much they are spending, and how much they are procuring, for example, per school place compared with other parts of the country, and we welcome that transparency. We do not agree, for example, with David Simmonds when he said earlier that his local authority is capable of building more effectively and cheaply than the Department. I am very happy, if he wants to, for us to agree to commission an independent assessor who will look at how efficiently our Department is building PSBP 1 and 2 schools versus his local authority, because I am very confident that it would show that we are doing this in a highly efficient way. We want local authorities to be transparent, but we are very happy to be transparent about our own activities.
Neil Carmichael
It has been suggested that allocations disproportionately benefit academies and schools in Government-held constituencies. Is that remotely possible?
Mr Laws
I do not believe that that is the case. All these things have been assessed on the basis of need. If it was the case that in the past, in particular parts of the country, the maintenance of schools had not been as good as in other parts, or if previous Governments had not fairly funded some parts of the country, so that there were higher maintenance backlogs, that could obviously drive an allocation where those areas would now be catching up. But the allocation methods that we use for basic need and maintenance and PSBP 1, and, for that matter, universal free school meals for infants, are totally needs-based. There are no political elements in them whatsoever. We take the advice of officials on the basis of the need and there is no political fixing of them whatsoever.
Chair
So in fact, seeming to do so is simply rectifying previous decision making, which may or may not itself have had political favour.
Mr Laws
Yes; if it does turn out that some parts of the country are receiving allocations per head that are higher than they have previously been, that would be correcting previous problems, not because of some bias in our current system.
Craig Whittaker
I just want to ask you one further thing. Going back to the programme coming in two years ahead of the initial schedule, I know that you mentioned that very few of the schools had huge issues, which allowed that to happen, but what is the main reason for it coming in two years under the projected finish?
Mr Laws
Why are we doing this two years faster?
Craig Whittaker
Yes.
Mr Laws
I think for two reasons. The performance of our officials in the Education Funding Agency in shrinking these times pre-procurement and after procurement has been very impressive, so we have discovered that the three-year periods for building that were occurring under BSF were extravagant, wasteful and unnecessary. Our colleagues in the EFA have done a far better job, and also, to be frank, we made sure that we brought forward those projects that looked as though they were going to back-ended, because understandably, if you have schools that are in a very bad condition, where the maintenance needs are very high, people do not want to spend money propping up buildings that are not fit for purpose. We therefore have to do them as quickly as possible, and we got pressure from MPs and others, who were saying, “You have acknowledged that my school is in a bad situation, but it may not be rebuilt till 2019—that is not good enough.” So we responded by making a big effort to bring the programme forward.
Craig Whittaker
Are definitely going to hit the target?
Mr Laws
Yes. As I said earlier, we have a tiny number of schools in PSBP 1—probably a number I could count on one hand—where, because of problems that are outside our control, there could be a delay that moves them beyond the end-of-2017 target date. As far as I can see, those problems are not due to our failure, but are necessary issues that have arisen on the ground. But the vast majority of this programme is going to time.
Mr Ward
We have spoken quite a lot this morning about the comparative costs of BSF and PSBP schools. Can I get a few comments from you on the issue that has been raised of additional costs? First, on abnormal costs—for example, you are digging away and you come across something underground that you didn’t know was there—the Royal Institute of British Architects suggested that those costs are not built into the original costings, and are recovered, in effect, through work on the building itself. Is there any evidence of that?
Mr Laws
If I understand the question, it is, if we procure the contractor and say, “We are going to give you £10 million”—or whatever it is—“to rebuild this school”, what happens if we hit something unexpected? We certainly don’t expect the local authority or the LA to pay. The issue is whether it is totally unexpected and couldn’t have been known—in which case, we would consider using money from a central contingency to fund it—or whether it is something that we would have expected the contractor, since they actually quoted for the job, to be able to accommodate themselves. Because it is public money, we are not simply going to write cheques to anybody who says that something slightly awkward has come up during a programme. We try to make sure it is funded either by the contractor or the EFA, as appropriate. They are not things that we expect the school to bear the burden of.
Mr Ward
On the issue of additional costs, as opposed to abnormal costs, which are to do with the facilities that are provided, we heard from Stratford SA that the additional costs were £600,000, which was not for luxuries, but for perimeter fencing for the students’ security and sports facilities to deliver the curriculum. They were additional costs that could not be afforded through the PSBP programme.
Mr Laws
As I mentioned, we are definitely not simply rebuilding buildings and not taking wider responsibilities where we should do so. Some 12% of the budget is for outside the school structure itself. We have to be careful about getting good value for money for the taxpayer. For example, my understanding about the Stratford school—I am happy to be corrected if I am wrong about this—is that they did have a boundary fence. The question was about whether they wanted something enhanced. Our judgment on these things is that this is primarily a building condition need programme. It is not about furniture, IT or improving sports facilities. Obviously, if you are a school that is being completely or largely rebuilt, you want to get as much value for money out of it as possible, but we also want to get as much value for money as possible. We don’t want to fund things that we think should be funded by the local authority or the school. There are other revenue streams to do some of those things, including devolved formula capital and local authority budgets. I can understand why school want those things, but it isn’t always sensible for us to take on some of those funding commitments.
Alex Cunningham
Minister, you referred earlier to announcements that are going to be made before the end of the Parliament. In an hour’s time, we will have the Budget. Are we expecting an announcement that there will be an enhancement for school capital?
Mr Laws
I hope you are not expecting me to leak contents of the Budget. I don’t think it would be a good idea for me to do that on Budget day—particularly live on television.
Alex Cunningham
In that case, what are the Government going to do to support schools that were due to receive funding under Building Schools for the Future, but have not been successful to date under PSBP?
Mr Laws
In spite of our criticisms of BSF, I do, of course, feel very sorry for many of the schools that hoped that they were going to get a rebuild and then didn’t because we were prioritising on the basis of need. Some of those schools have been able to bid into priority school building 1 and 2. They have shown that they are schools that deserve to be rebuilt, and we are doing that. I should point out that we are still devolving huge amounts of capital through the programmes that schools can bid into directly, such as the condition improvement fund, which we are going to allocate some more of before the end of this Parliament, and the LA maintenance allocations. We have just devolved £4.2 billion over three years to local authorities to improve the condition of their school estates. If I was a school that wanted to be redone in BSF or Priority School Building Programme 2 or 1, particularly if it had the support of the LA, I would now be going to the local authority and saying, “You’ve got this allocation from the Government for three whole years. You clearly think that we’re a school that has a need, because you put us in for PSBP 1 or 2. Now let’s talk about how we’re going to use some of that money to improve our school.”
Alex Cunningham
Okay. I’m glad you raised that particular project. There are many local authority programmes for routine maintenance. I think you call it the school condition allocation. But bearing it in mind that local authorities might have 30, 40, 50 or more schools requiring support, how can they really be expected to use those budgets to concentrate on a very few schools that haven’t been successful under your programme?
Mr Laws
I think you’re making the case, which I made earlier, for going on having in the future central programmes of this type, because where there are very high costs that have to be undertaken for schools—where a school is sort of falling down and really needs rebuilding—those huge costs falling on individual local authorities could be extremely difficult, because their formulaic allocation would not have those huge and lumpy allocations for individual schools. That is why I think a central programme makes sense, but it will necessarily be the case that the schools that haven’t got into the Priority School Building Programmes will be the ones with a lower assessed level of need, and it should be far more possible for the local authority to use their own capital resources to invest in those schools. I appreciate that the schools may not get all that they want, because the local authority does have to spread those resources across a number of schools, but if they do have high need, the local authority should be spending a lot of that money on them.
Alex Cunningham
Children from my constituency travel to Egglescliffe school in the neighbouring constituency. That school has been refused rebuild funding despite being in the BSF programme and despite being extremely popular and in extreme need of replacement. You suggested in a letter to the borough council that they ought to prioritise funding from their £1.6 million maintenance budget, which is supposed to cover routine work for 40-odd schools. Is that the kind of advice that you’re giving local authorities—that they should prioritise one major project over all the other schools together when schools across the piece require help?
Mr Laws
I am certainly not trying to second-guess local authorities on every single decision they have to take in allocating that money, because they will have more accurate information about all their schools than I will. Some local authorities could have schools of the type that you describe, but have a number of other schools with serious needs, so they would have to spread their money over a number of them. There may be local authorities that have a very small number of schools and only one school really stands out. Now that we are giving local authorities three years of maintenance allocations, they have more money to plan with and they might be in a position whereby they could put quite a lot of their own money into those schools that have missed the Priority School Building Programmes.
Alex Cunningham
So the local authority should be driving what the programme should be and not direction from yourself like there is in this letter that you wrote to the borough council, in which you were suggesting that they needed to prioritise work at Egglescliffe school.
Mr Laws
Well, I certainly think that if they themselves wrote to us and said, “This is one of our priority schools,” which was usually what had to happen as part of the Priority School Building Programme application round, if they put forward those schools and said, “These are some of our needier schools,” it would be right for me to go back to them and say, “You didn’t meet the cut-off for this programme, but you now have three years of maintenance money. Presumably you will want to make this school one of your priorities for that.” But I’m not going to tell the local authority precisely how to break up that three-year allocation budget, because you’re right: I don’t know the position of all their other schools. Only they will be able to make that sensible judgment.
Alex Cunningham
Okay. You also wrote about the £1.6 billion basic need funding for local authorities to create new school places. Will that money go only to create new school places, or can we expect needy schools such as Egglescliffe to receive funding from that pot or maybe an early allocation from a future round of PSBP?
Mr Laws
A school that is growing could obviously receive money from the basic need budget as well as maintenance, and although we want to hold local authorities to account for how that money is spent, ultimately the capital budgets that are devolved to local authorities are not ring-fenced, so if a local authority felt that they could use their money sensibly by shifting between these different pots, they could do that. But we have allocated basic need money on the basis that we think that they will need to create new school places, so clearly they would need to be careful about shifting between pots, to make sure they were delivering both improved school condition and the right number of places.
Alex Cunningham
Finally from me, children have been denied places at their school of choice because other parents have declined to send their children to unproven new free schools, opting for an established school instead. There are examples across the country of that. There is one particularly relating to the school I have already mentioned in Stockton. What are you doing to ensure that this does not happen in areas like Stockton and elsewhere in the country, and that new capacity created by free schools is used by people in the closest communities so that this capital allocation is not wasted? It is no good having an empty free school if kids at the other end of the borough cannot get in.
Mr Laws
We are doing three things. First, we don’t take free schools into account in the basic need allocations until they are open, so we deal with the risk that they won’t open by making sure that we don’t deduct capital for that purpose.
Alex Cunningham
This one is open.
Mr Laws
Secondly, we are making sure that local authorities can have smaller planning areas so that we don’t penalise them for spare places in an area that is too far to travel to. Thirdly—I think we did this for the first time in the allocation last year—we are building in a surplus assumption for school places instead of trying to fund just capacity. We believe that local authorities ought to have not just one school place for each child but a reasonable surplus to enable risk to be managed and for there to be some exercise of parental choice.
Chair
How much is that?
Mr Laws
I believe that the surplus we are currently funding is 5%, but I will be corrected by officials if I am wrong.
Chair
Previously, you had just been aiming at 100% and now you are looking at 105%. Is that right?
Mr Laws
At one period of time we were aiming at 100% by just funding the places that were needed. Of course, prior to the last election, previous Governments did not even take into account the proportion of surplus places when they allocated money. They simply allocated more money on the basis of extra pupils, regardless of whether half the existing places were free. It was not a good system that we inherited, and we have a far better system now.
Chair
What message would you send to those schools that applied for PSBP 1 and 2 but failed? What confidence can they have that they will be funded in future?
Mr Laws
If they are academies, I would urge them to apply to the new condition improvement fund. Obviously, through that we fund some quite large bids. We are going through the bids and approving them at the moment. Although some of them are for £40,000 or £50,000, there will be some multimillion pound bids. If they are academies, they can bid for that and potentially get a large amount of money. If they are LA-maintained schools, they should know that we have now made this three-year allocation of maintenance, perhaps for the first time ever, so local authorities now have a lot of money for this, which is allocated on the basis of need in their area. Schools should be going to the local authority, particularly if the local authority put them forward for one of the Priority School Building Programmes, and saying, “We are disappointed that we didn’t get into it, but we know you have some money allocated for condition need. You obviously accept that we have condition need, so can we now sit down and talk about how some of that money can come our way?”
Chair
Thank you. Having written to ask you to change it to a three-year view, I am delighted that you have done so. Beverley St Nicholas primary school will be moved from two sites to one as a result, and I am pleased about that. What assumptions have the Government made about the long-term maintenance costs of PSBP schools compared with BSF schools?
Mr Laws
PSBP?
Chair
Versus BSF. We heard from the first panel that there are differences in approach. What assessment has been made of the future maintenance costs?
Mr Laws
I am not aware of any assessment that is any different for the two programmes, but I will write to you if I have that wrong.
Chair
The LGA reckoned that in 2010 there was a £15 billion capital requirement for school building need. Do you think that was a reasonable estimate?
Mr Laws
I think it is very difficult to say. Mr Whittaker raised this earlier, and in this particular programme we obviously haven’t been able to go in and carry out very intrusive, invasive surveys of every single school in the school estate. You would need to do that to come up with a very reliable number. There isn’t a departmental figure for this.
Chair
You said that you do not want to do invasive stuff on individual schools because it will all average out across groups, which makes sense, but I cannot imagine spending £10 million-plus on a school condition survey and at the end, when they come back to present it to me, saying, “There is no total.” That sounds absurd. That is the whole basis of it. If I ask for someone to do a condition survey across those things, they will come back and tell me, “Right, it’s 55,000 quid”—or in this case x billion pounds. Surely you must have got that number. You may not want to share it with us, but it must exist.
Mr Laws
The problem is that what we have not got is a figure that actually reflects the real maintenance needs and rebuild costs of every single school, because to do that we would have to do a very invasive survey of the type that I have explained we have not been able to do.
Chair
I have just explained I do not think that is true, because if you are going across enough schools—and we are talking about the whole of the English school estate—you do not need to do that. You do not need to do an invasive one, on every single one. Otherwise you would be doing that now, because you could not make any kind of sensible and rational allocations; and you have said that you are much better informed than ever before. So you must have that.
Mr Laws
We are much better informed than ever before, but we do not have a single figure that would reflect what it would cost for us to essentially rebuild to a perfect standard the whole school estate.
Chair
That is not what I said. You do a survey. Then, if you were a property company or a retailer, you would get that and you would turn that into numbers, so that you could say, “Right; across all my British Home Stores stores I have £1 billion that needs to be spent and it is phased like this.” Then you would turn it into numbers. That is the whole point of doing it.
Mr Laws
But we know that because we have not been able to do the invasive stuff we don’t have those detailed numbers, and it would be very risky for us to suddenly produce an estimate that did not include all of that other work. It might not be very good in trying to make an accurate and informed bid to the Treasury about the future capital needs of the school estate.
Chair
I do not want to do this to death, because you have always been a remarkably frank and well informed Minister before this Committee. I cannot remember a previous occasion on which I have thought, “I don’t quite believe this,” and it may be a failure of understanding on my part, but I am sitting here thinking, “I don’t quite believe this.”
Mr Laws
Well, I think you should believe it, Chair, because not only am I saying it but it is the case that we have not carried out the detailed work at every single school to say precisely how—
Chair
You don’t have to.
Mr Laws
And we have surveyed the costs at this higher level that I have mentioned.
Chair
So what does that add up to—the higher level costs that you have added up to? There must be a number. The LGA went for £15 billion and we accept it. They haven’t done an invasive thing—but you come up with an estimate. Otherwise, how can you have a chat with the Treasury? “Hi George; schools are important. We have done a survey,” and he says, “Well, how much is the backlog, then?” Do you go, “I don’t know, because we haven’t done an invasive survey yet”? “You must have a number, otherwise you couldn’t ask me for any money.” And you say, “Oh no, I haven’t been into all the schools.” It is not a conversation I can even imagine.
Mr Laws
I do not have that figure now, because what we have tried to use this for, which has been our focus, is what are we actually going to do with this data; and what we are going to do with this data is identify the schools in the worst condition, to try to actually get those rebuilt, and make sure that we have formulaic allocations, which spread the money that the Treasury has already given us in a fair and reasonable way across the country. If I went to the Chancellor and said, “Oh, by the way, here is some of the data from the Property Data Survey, but it doesn’t actually include all the full building costs,” there is a risk that he might say, “Great, I’ll give you that money, and don’t worry about all the intrusive surveys that might reveal other problems.” So it might well lead to an under-estimate of the works that we would need to do to the school estate.
Craig Whittaker
Just finally from me, the local authorities up to 2005 used to provide to central Government what they call a statement of priorities. A lot of local authorities still use that statement of priorities as a working document to allocate maintenance and priority works. Why do we not just ask the local authorities for what is out there? Rather than doing a drive-by—okay, my words not yours—visual survey, why don’t we use the information that is out in the local authorities?
Mr Laws
We might do something like that in the future. Our problem—and we discovered this as we were doing the Property Data Survey, because we were originally, as I think you probably know, intending to use some surveys that had been done on schools by individual local authorities—was when we quality-assured the surveys coming in from local authorities against our own centrally-commissioned standardised surveys, on which we had taken considerable advice on what we should be doing, there was not a consistency. The figures varied by different amounts by different authorities, so we had to— particularly as were going to use this to allocate money across the whole country—use a consistent survey. In the future, it is possible, as you say, that we could agree a consistent methodology—whether it would be the different types of methodology that we have been debating today. We could then insist that local authorities did that work themselves and reported it back to us, but we would have to make sure we had a quality-assurance mechanism.
Craig Whittaker
But they already do it. That is how they allocate the money that you give them for maintenance. That is how they allocate the money out.
Mr Laws
They don’t do it, in our view, in a way that is sufficiently consistent across local authorities and reliable that we would have wanted to use it for our capital allocation.
Craig Whittaker
But it is as consistent as your drive-by surveys.
Mr Laws
I don’t think “drive-by surveys” was a term that I was willing to sign up to, Mr Whittaker.
Chair
Thank you very much for giving evidence to us today and for all the other evidence you have given to us over time. We look forward to hearing from you on the other issues which you have touched upon.
Mr Laws
And may I thank you on behalf of the Department for the work that you and your colleagues have done over the years in scrutinising our work as a Department.
Chair
Thank you. Oral evidence: Priority Schools Building Programme, HC 1090 21