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Where now for the education sector?

In his Comprehensive Spending Review, George Osborne told us that capital spending on schools will fall by 60 per cent from now until 2014/15. The extent of this particular cut took most of us by surprise.

This is on top of the axing of the Building Schools for the Future (BSF) programme managed by Partnerships for Schools. School construction costs are now the subject of a review led by John Hood, Oxford University’s retired vice-chancellor.

Remember education secretary Michael Gove lambasting the cost of the BSF programme? Mr Gove claimed that BSF schools were three times as expensive as commercial buildings and cost twice as much to build as schools in Ireland.

What he neglected to mention was that the BSF programme was largely dependent upon traditional construction procurement strategies which are notoriously wasteful. Here are just a few examples of waste:

  • Fragmented delivery by multiple layers of subcontracting resulting in countless interfaces;
  • Constant re-design and re-work by supply chains delivering to a design in which they’ve had no involvement;
  • Repetitive duplication of drawings, specifications and enquiry documents for tendering, with such duplication being repeated through the many layers of subcontracting;
  • Negotiation of multiple layers of contract terms, payment arrangements and insurance requirements, usually with the aim of ensuring that project risks lie with SMEs at the end of the supply chain.

Based on statistics published two years ago by the National Audit Office, traditional procurement is wasting the public sector £82.67 per second.

If I was John Hood, these would be my recommendations:

  • Those initiating school projects should demonstrate that their proposal will deliver ‘more for less’ by adopting a procurement approach based upon the use of project teams working together from project inception;
  • Failure to demonstrate the above should result in a withholding of funding (the NAO has already endorsed this approach);
  • Industry trade bodies should encourage firms to work closely with other project deliverers to demonstrate that elimination of wasteful processes can be achieved through teamwork;
  • There should be greater cost transparency in school construction; benchmark costs should be publicised and project teams should primarily compete on their ability - particularly their technical ability - to deliver against the functional requirements.

So, Mr Osborne, there you have it. You don’t need to cut school construction; you should now begin to cut the waste by abandoning traditional procurement.

In its place the team - including building services firms which provide high value inputs - should be engaged at the front-end of school projects so that they can buy into decisions on cost, design and risk management. Easy, really!

Professor Rudi Klein is chief executive of the Specialist Engineering Contractors’ Group International