Have your say about BSF on the BBC

[timbo343]

I have just spotted this

BBC NEWS | Education | Record number of schools opened

Its our chance to let the BBC know what the BSF is really like!!

[somabc]

I have just spotted this

BBC NEWS | Education | Record number of schools opened

Its our chance to let the BBC know what the BSF is really like!!

Should it not say record number of privately built schools opened which are not going to cost much at first but over the next 30 years will cost billions in rent / PFI fees to a consortium of banks and private equity companies and the whole exercise will have to be repeated in 30-50 years as the Schools are not built to last?

Honestly the only reason so many schools are built is because the owners can build the school for £10 million but get £50 million back from the taxpayer over 25 years. Who wouldn't want to build them?

The only bigger scam possible would be to hand out mortgages left right and centre to people with no income, no job and no ability to repay, then ask the government for the money their customers can't pay back. Bet you could get £3 trillion of taxpayers money then. Why didn't I think of that?

[timbo343]

Exactly... but they have my comments and opinions on the BSF... will see if my response gets posted on the site

[somabc]

35bn revamp will produce generation of mediocre schools | Politics | The Guardian

In numbers

£35bn
Cost of the Building Schools for the Future programme

3,500
secondary schools to be rebuilt or improved by 2020

200
new and refurbished schools per year by 2011

33
out of the 40 most advanced designs have been denounced as "not good enough" or "mediocre"

"Ultimately it should not be acceptable for public money to be used to procure poorly designed schools," said Richard Simmons, chief executive of Cabe, which is being funded by the government to scrutinise school designs. "The design quality of schools reviewed so far has not been high enough.

Roughly 10% of BSF funding (£3.5billion) is allocated to ICT.

ICT provision on a school by school basis is unlikely to be value for money.

Have you seen this? Apologies if everyone has read it already.

http://www.unison.org.uk/file/A2337.pdf

http://www.partnershipsforschools.or...ide%202008.pdf

Key Points on PFI

BSF funds are allocated on the basis that 50% of the floor area within
each local authority’s BSF project can be ‘new build’ i.e. completely new
facilities will be built. The remaining floor area is funded so that 35%
can be remodelled and 15% undergo refurbishment. The floor area is
calculated using the national space guidelines for secondary schools in
DCSF Building Bulletin 98 for the current number of schools in that
particular wave.

Pupil numbers are also used in the calculation and are based on the 10
year projections agreed with the local authority. These can allow, for
example, for any proposed rationalisation.

Funding for running costs once the school is built will come from the DCSF
rather than the local authority.

Once the managed service is in place, schools will pay an annual service charge. This will be negotiated with the local authority in advance of signing the managed service contract and will be covered by the agreement between the governors and the local authority.

Payment for the ICT assets (e.g. hardware, network components) and
the services within the implementation period will be made by the local
authority to the LEP on a school by school basis.

The payment for the implementation will normally be made in three
milestones:
■ 70% will be paid following satisfactory completion of
implementation testing;
■ 25% will be paid following a period of two consecutive months
during which the performance of the ICT Operational Services
at the school has been of a sufficiently high standard; and
■ the final 5% will be paid upon successful implementation
of the area wide network across the schools and will therefore
follow the implementation tests for the final school.

BSF funding does not cover staff resourcing and it is estimated that local
authorities will spend the equivalent of 2-3% of their total BSF funding to
deliver the programme locally. Likewise, school governing bodies need to
agree in principle to commit future revenue funding to buy agreed levels
of service for ICT, facilities management, maintenance and any services
provided through a PFI agreement.

In PFI, a private sector partner is awarded a contract to design and build a
school and then to operate and maintain that school (and provide related
services) usually for 25 years or more. Often that private sector partner
comprises a consortium of organisations, working together and
co-ordinated under one umbrella, called a Special Purpose Vehicle (SPV).

The SPV is also responsible for raising the necessary finance for the project.
With PFI there is considerable scope for innovation: the local authority, together with the school(s), sets the overall objectives (i.e. building a school with specified facilities and operating it to set standards) in a document known as an Output Specification. The local authority then invites prospective contractors to bid and price their proposed solutions to those requirements.

Under a PFI contract, the SPV provides, pays for and operates the
school buildings over the period of the contract. It therefore acts as if
it is effectively the owner of the school buildings. However, the local
authority, or trustees (in the case of a VA school) retain the freehold of
the site, and the SPV has a lease or a licence to use or occupy the site. At
the end of the contract the whole school reverts to the local authority or
governors (or trustees for VA). When the buildings are handed back they
must be ‘fit for purpose’ for a period beyond the end of the contract.
Existing schools with new facilities provided under PFI are operated in their
entirety under the contract. It is not practical or desirable to have parts of
schools subject to such long-term agreements, whilst other parts are not.

Where a LEP is formed for the delivery of BSF projects, it will set up
and invest in an SPV for the PFI contracts. Many organisations and
consortia bidding to form LEPs are composed of companies with previous
experience of PFI contracts. The LEP will normally be composed of at least
80% private sector to 20% local authority.

Once a contract is signed, the local authority receives financial
support towards the cost of the contract through revenue support
from the government. However, this contribution, whilst substantial, is
intended to cover only that part of the unitary charge relating to the
repayment of capital and life cycle maintenance. The local authority will
therefore need to cover the remainder of the charge, often referred to
as the affordability gap or an increase to the council’s contribution. It
should, however, be noted that the service specification for PFI schools is
often set at a higher standard than conventional service contracts.

The local authority pays a monthly fee called the Unitary
Charge to the SPV to cover its capital repayment and service delivery
costs. The Unitary Charge is subject to inflation on pre-agreed indices and
is subject to benchmarking (soft services costs only) at periodic intervals,
usually every 7 years.

In a school provided through a PFI contract the headteacher is no longer
directly responsible for many aspects of the school buildings – the
responsibilities are transferred to the contractor (which has a contract
with the local authority rather than directly with the school).

[torledo]

The more i read about pfi the more it sounds more like shared equity [another govt. favourite]....the PFI contactor will pay for building and looking after the school and rents it back to the LA/school over 25 years - at the end of which the contractor has more than recouped their investment, the LA [taxpayer] has paid massively over the odds in leasehold payments, and who knows what the country and economy will look like in 25 years. So the value to the LA [taxpayer] of the building as a school will not be clear. [who knows by then evey child in the country could be distance learning]

Not disimilar to Gordons relaunch initiave of getting LA's to bail out those homeowners struggling to keep up repayments on their 125% mortgages.

[somabc]

So how do these sports utility vehicles [sorry couldn't resist] make their money....they raise the finance for building and completion of the projects, they don't own the freehold on the sites, and have to hand the school back to the LA after 25 years....Am i right in thinking they make the money by charging the govt. a fat wad of cash for running the school each year, which the taxpayer funds....but because it's annual payments spread over many years rather than a large lump sum, it's like a buy now what we as a nation can't afford and spread the repayments over 25 years....paying back the SPV's investment plus a daily compound interest over the length of the contract. Creative accounting to allow us to get the nice shiny schools without blowing a gaping hole in our finances up front.

The SPV's being the HBOS to our subprime borrower on an interest only mortgage.....we can't afford to repay the capital, we haven't even got a decent deposit let alone the cash to buy the dream home outright, so we pay back the interest only, get a brand spanking new home in the meantime and after 25 years have to stump up the cash to repay in full otherwise we're screwed. By which time we're hoping the property is worth a fortune to bail us out or it becomes someone elses problem i.e next of kin.

Or am i totally off the beaten track....crap analogy i know. But i can see the parallels in how we as a nation have financed house buying and how the zanulabour finances it's own little spending sprees.

You are exactly right, we are using Buy Now Pay Later. The government gets lots new schools (or hospitals or whatever) now, pay very little upfront and if it doesn't work out who cares as they will only be around for a few years anyway. At least in a mortgage you pay back the market value of the building, PFI is designed to pay more than the market value.

Private Finance Initiative - Wikipedia, the free encyclopedia

Here's a typical example

The construction company (or SPV) has to build a £100 million school at current cost of building the school outright. They invest £10 million of their money in the project. They borrow £90 million using the £10 million as collateral and the Government contract guaranteeing future earnings as proof they will be able to service the debt. They build the school.

The government (ie you) pay them lots of money to run the school say £10 million a year for 25 Years (this figure is for simplicity in actual fact they will pay on a sliding scale as time goes on starting small say £1-2 million then rising to £5-10-20 million etc).

So the government has a school worth £100 million but pays £250 million, the SPV has invested £10 million and got back £250 million, pays back the £90 million leaving a profit of £160 million to enable them to invest in more construction projects which will earn more money. It is a magic money making scheme.

Now what's the alternative? The government could take £10 million, borrow £90 million on the money markets, issuing bonds, and get a better rate of interest as it will not default on the loan. Then they hire the aforementioned construction company to build the school for £100 million and pay back the loans. They can pay back the £90 million over 25 years if they wish to spend less money now. Then you have a school for £100 million that's yours with no hefty annual service charges. (You also avoid a lot of consultants fees )

George Monbiot: Our very own Enron | Politics | The Guardian

[broc]

PFI school ownership transfers to the LA at the end of the agreement.

Now, if you were a building contractor building a school that you had to maintain for 25 years and then hand over to the LA, what sort of building would you build? Would it be something rock solid, that would last a 100 years, or something less robust that would last 25-30 years?

Makes you wonder.....

[bossman]

I feel it is just another case of big business holding the government by the b*lls driving forward what they want, just like they have with the housing market to make money for them and their shareholders without any care and consideration for the students or staff within the schools and least of all the honest hard working people of this country who pay their taxes for it all to be wasted on money making schemes for big business.

[Dos_Box]

I don't like George Monbiot, but he does talk a lot of sense at times. Not all the time mind you, just some like, that article.

[TechMonkey]

PFI school ownership transfers to the LA at the end of the agreement.

Now, if you were a building contractor building a school that you had to maintain for 25 years and then hand over to the LA, what sort of building would you build? Would it be something rock solid, that would last a 100 years, or something less robust that would last 25-30 years?

Makes you wonder.....

Local PFI school I ahve deals with won't last 10 let along 25-30. PLus they are completely expecting no maintenance to be carried out in the last 3-5.

[rhyds]

The site manager and I were discussing this on the roof a while back. Our school was built a fair few years ago, and is BUILT TO LAST. We're talking solid walls, cast iron guttering and all those old solid building materials like lead and asbestos. I doubt our new building will be as well made.

[CyberNerd]

The site manager and I were discussing this on the roof a while back. Our school was built a fair few years ago, and is BUILT TO LAST. We're talking solid walls, cast iron guttering and all those old solid building materials like lead and asbestos. I doubt our new building will be as well made.

Asbestos buildings aren't a such selling point when maintenance/alterations are required.

[bossman]

Our estates manager has turned our nearly 50 year old school into a warm friendly place that is bright and airy and i would like to see one of these PFIs or BSF schools compare long term.
I watched a drama on the tv the other night called "the Children" and there was a clip in a school which looked like it had just been built and my wife retorted that looks just like a prison with it's galleries, looking at it she was right it did look rather like a brand new prison.
Maybe Government has a new strategy, getting the kids used to prison environment as 20% will probably end up there (cut out the middleman) go direct to jail do not pass go do not collect £200 hehe!

[rhyds]

Asbestos buildings aren't a such selling point when maintenance/alterations are required.

I seem to have missed out the smiley. I'm not sure how much asbestos we have but it isn't much, and the lead/cast iron will probably raise enough cash as scrap metal to pay for the new building lol.

[CyberNerd]

I seem to have missed out the smiley. I'm not sure how much asbestos we have but it isn't much, and the lead/cast iron will probably raise enough cash as scrap metal to pay for the new building lol.

lol, most of our lead got nicked already