New BSF delays imminent as Gove wreaks more havoc on schools

25 08 2010

The national school-building programme has been thrown into confusion once again after the government delayed work on schools that have been approved for development.

When Education Secretary Michael Gove scrapped Labour’s Building Schools for the Future (BSF) scheme earlier this summer, he allowed a small number of ‘sample school’ projects to go ahead where contracts had yet to be signed.

But according to business publication Infrastructure Journal [subscription required], Partnerships for Schools (PfS) – the national agency that oversees the BSF programme – has written to the councils and private firms developing these sample school projects, warning them to halt work pending yet another review.

The move throws many school projects back into limbo. Gove had delayed a decision on the sample schools before finally approving a number of them earlier this month. The latest review will delay these schemes yet again.

Under the review, Gove will consider the legal structures under which the schools are built on a case-by-case basis. The letter states: ‘There is no certainty as to what structure may or may not be permitted and it is possible [Gove] may conclude that no form of exclusivity is acceptable.’

This exclusivity point is crucial – it amounts to a strong suggestion that the government is trying to extricate the BSF schemes in question from the exclusivity arrangements that are automatically granted to the selected private sector bidder. This exclusivity gives the selected bidder the sole right to develop any school project over a certain value (typically £100,000) in the given area over a 10-year period.

The problem for the government is this:

  • where BSF schemes had selected a private sector bidder but not yet signed binding contracts, Gove kept some of their sample school projects but ditched the remaining projects
  • for the sample schools to go ahead, the schemes now need to sign binding contracts
  • signing binding contracts will give legal effect to the exclusivity arrangements, meaning no other company can carry out a major school project in the area for 10 years
  • this means that other than the sample school projects, no other school redevelopment would be able to proceed, no matter how necessary, without the involvement or blessing of the selected private sector bidder

Schemes that had already signed binding contracts before Gove axed BSF are not affected. Gove approved these schemes in their entirety, meaning all local school redevelopment is going ahead in these areas.

But the potential problems in areas where only sample schools were approved explain why Gove is now searching for a get-out clause from the exclusivity arrangements.

And while he looks for a way out via this latest review, important school redevelopment work must wait even longer. PfS has instructed the affected local authorities not to incur any more expenditure on their schemes pending the review.

Kiel Porter, the reporter who broke the story for Infrastructure Journal, told A Thousand Cuts: “Technically they can do it as nothing has been signed, but it would create all sorts of problems.

“First it would make a mockery of the bidding process and allow not just the preferred bidder but also losing bidders to claim the process was flawed. The test case (SITA v Greater Manchester Waste Disposal Authority) is still going on three years later with fees totalling millions.

“Second it would require a completely new project agreement that could take months to draft – and no one has the time to do it. Schools are already falling behind.”

Quite apart from yet another bungle from the increasingly hapless Gove – does anyone still describe him as a ‘rising star’? – it is also an example of how the government’s deficit machismo is blowing up in its face.

By rushing ahead with major cuts in an attempt to strike intimidating postures of intent, the government has not thought things through and is seeing unexpected problems crop up all over the place.

With BSF, we’ve already had the shambles over the publication of inaccurate lists of cancelled schools because Gove didn’t want to check the data first. Now we have Gove firing off panicking letters via PfS because he evidently didn’t consider the exclusivity issue when he axed BSF in the first place.

But it’s not just BSF. The in-year funding cuts to local authorities have forced councils to desperately hack away at local services such as Connexions. Had the cuts been delayed by a year, councils would at least have been able to prepare in advance and avoid making legally binding spending commitments.

Instead they must rush cuts through with large amounts of spending already committed. Council spending cuts have been determined not by the relative importance of specific services, but by which services have signed bits of paper and which do not.

Meanwhile Andrew Lansley’s hasty ‘denationalisation’ of NHS commissioning is heading for the courts over the legality of its unconvincing consultation process.

When millions of people’s personal details went missing under Labour in late 2007, the then-Shadow Chancellor George Osborne delivered this scathing attack on a government that had become obsessed with finding a grand vision:

“Never mind the lack of vision – just get a grip and deliver a basic level of competence.”

As the coalition revels in its epochal ‘transformation’ of the public sector, Osborne and co would do well to heed their own advice.

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