School rebuilding delayed by lack of finance

The government's scheme to rebuild England's most crumbling schools is being held up by delays in finding private cash to fund it.

This means scores of projects at some of the nation's most dilapidated schools are yet to get off the ground.

The government is now looking to capital bond markets and even the European Investment Bank to fund its priority school building programme.

Schools minister David Laws said the programme would be completed on time.

But he acknowledged that government still had to finalise its plans for private finance deals. He was expecting this to happen very soon.

The Department for Education denied there were delays to the programme, but said it was essential to take the time to find the right finance arrangement for each school, and confirmed it was now looking at a number of options including a bond finance solution.

When Education Secretary Michael Gove announced in May last year that 261 schools would be rebuilt or refurbished through his new Priority School Building Programme, he said work would "begin immediately", with the first schools opening in 2014.

But the Department for Education's executive arm, the Education Funding Agency, has yet to secure private investment to fund the vast majority, 219, of the projects in the five-year programme.

And this has led to delays of at least a year to the start of work in any school that was due to be funded by a new form of private finance initiative. Some in the earliest wave are being told work is unlikely to be completed until 2016.

It is likely that only a handful of schools, those funded directly by the government, will be rebuilt by the general election.

'Falling drainpipes'

A survey of the 261 schools in the priority programme, by the Local Government Association found that, of the 158 that replied, only 19 had start dates - and none of the privately financed projects who responded said they had funding secured. Some 66 schools told the LGA they had heard nothing on their rebuilds.

Councils, such as Northumberland, which has three schools in the first wave of the programme, have been warned by the EFA that the lack of private finance has resulted in the later start date - still to be set.

Another school, considered to be one of the most needy, Hetton School in Sunderland, is also waiting to hear how its rebuild will be funded. It has been told completion could be as late as September 2016.

Local MP Bridget Phillipson wrote to the education secretary about the school, saying: "I can't emphasise how urgently the situation requires action by your department.

"The building continues to deteriorate; drainpipes have fallen from buildings: three areas of the school have been closed due to movement of asbestos ceiling tiles in the wind; and there have been heating failures in four different areas of the school."

She said the condition of the building was affecting teaching and learning, and told the BBC she was very concerned about the apparent lack of funding for the scheme: "Until they actually secure the funding, it is as good me saying I am going to fund the schools."

The revelation will be an embarrassment to Mr Gove, who scrapped Labour's Building Schools for the Future scheme in July 2010, saying it was beset by bureaucracy and delay.

And according to the construction industry, discussions with the DfE about how to fund the scheme have been on-going since then. And official documents show that the EFA recognised as early as September 2012 "that long term project finance" was constrained, and that it needed to look at alternative sources of finance, including the potential participation of the European Investment Bank.

Local councils and head teachers are getting increasingly frustrated with the delay and the lack of information from the DfE on the progress of projects.

Chairman of the Local Government Association Councillor David Simmonds said the situation was now unacceptable and "threatens to severely impact on our children's education".

"Councils are stepping in to keep schools running while government struggles to get its act together. Local government is already carrying out basic repairs but we could deliver so much more with funds that are currently tied up in government red tape."

He added: "Heads and parents are telling us that the condition of some schools is so bad it's getting in the way of providing a good education."

About 260 of England's most dilapidated schools have been ear-marked for rebuilds.

'Tip of the iceberg'

Stephen Beechey, head of Education at construction firm Wates, which has been working with the DfE on the programme, said there had been an almost constant dialogue with the DfE about financing since BSF was scrapped in 2010.

But, he said, it was now "crucial to receive a final decision on the private finance element of the programme as soon as possible" to allow the procurement process to start.

"Once there is an agreement on funding it won't be until at least a year afterwards that we will be able to get a spade in the ground."

This suggests that there will be a minimum of a year's delay to this part of the programme.

The Association of School and College Leaders was very concerned to hear of the delays. Its deputy general secretary Malcolm Trobe said the government needed to address the issue urgently and ensure there was no further slippage in the timetable.

He added: "The priority school building programme is only addressing the bit of the iceberg that is out of the water in terms of the condition of school buildings. This is a priority programme and it should be a priority."

A Department for Education spokeswoman said it had already appointed contractors for the first two batches of capital-funded schools and that the first privately financed projects would be released to market shortly.

Of the privately-financed schools, Mr Laws said: "Some will be done to open in 2015 and I want to make sure that all of them open for 2017. The schools have never actually had a precise opening date. What they have had is dates when the Education Funding Agency will be engaging with them to tell us about their plans and talk with contractors about when they were going to be opening."

Shadow education secretary Stephen Twigg said: "The government promised to refurbish hundreds of schools but they have delivered almost nothing in three years. Their promises have amounted to little more than chaos, incompetence and repeated delays.

"Labour had a working, effective school rebuilding programme. Instead of building on that success, Michael Gove scrapped it and has left thousands of pupils and teachers working in buildings which are in desperate need of repair. All the time while mismanaging the academies programme to a tune of £1bn."