With the cost of addressing the shortage of school places set to reach £18bn, how can the funding gap be bridged?
The cost of providing the 878,000 additional school places needed between 2015 and 2023 has been estimated at £12bn.
We have analysed our benchmarking data, drawn from our work on school projects with local authorities and the Department for Education, and we believe that a more accurate figure would be in excess of £18bn.
The reasons for this are:
- A large proportion of the places, perhaps 40% will be achieved by expanding existing schools. This is more expensive to do, per child place created than building new schools
- School expansion costs are rising because in areas of high demand the ‘easy’ school expansions have already been done, and local authorities are now faced with addressing the projects that are more difficult and expensive because of the nature of the site
- Increasingly, the government is having to buy the land to build new schools, paying market prices in urban areas where values are rising
- SEN school places are urgently needed, and these are very expensive to provide
- Cheap and easy temporary fixes are no longer available
- Construction costs are rising.
The funding gap which public agencies have to deal with is getting larger
All of this means that the funding gap which public agencies have to deal with is getting larger. What are the solutions to this? The answers lie amongst a mix of design, specification, procurement and stakeholder management solutions amongst which the following are perhaps the most powerful:
Driving design standardisation. After two years of government driven standardisation, designers are learning to design really efficiently, and contractors are learning to procure materials in bulk. Local authorities have to follow suit across their programmes, procuring schools in batches. The Government should further develop the art of standardised bulk procurement of schools, potentially driving direct relationships with materials suppliers as well as building contractors.
Flexible procurement. For the next few years it will be a sellers’ market and building procurers will pay higher and higher prices for transferring construction risks to resource constrained builders who have choices about where they work. Clients will have to share risks and adjust their procurement approach according to market capacity, and they should maintain a dialogue with their suppliers and builders.
Driving value from scarce land resources. If public bodies are paying high prices for land they are going to have to consider creating mixed developments where housing and other commercial uses are built above and around schools to create value. This could extend to buying school space from investors in the same way as commercial property space. This might be a more flexible way of creating space and ultimately better value for the public purse.
Marcus Fagent is a partner and head of education at EC Harris