One of the many problems besetting the government’s plan to refurbish or replace every secondary school in Britain has been that nobody was permanently in charge of it. Now that that’s about to change, can we expect the work to start flowing?
For eight months, David Goldstone has been the acting chief executive of Partnerships for Schools, the quango overseeing the government’s £2bn-a-year programme to refurbish or rebuild every secondary school in the country. During that time, the Department for Education and Skills has been searching for someone to take up the role permanently. Now it seems that they have located that person: David Goldstone. All it will require is the removal of the word “acting” from his job title.
The move is a pragmatic response to a problematic situation. The refurbishment programme is essential to securing the medium-term future of the British education system, and the government has committed itself to doing it in style. David Miliband, the rapidly rising schools minister, last year launched the Schools for the Future programme complete with exemplary designs from Will Alsop and Wilkinson Eyre, among others. So much for the aspirations. The problem, of course, is organising a task of this magnitude in the public sector – as the fate of Goldstone’s predecessor demonstrates.
The previous chief executive of Partnership for Schools was a former employee of Amey and Carillion called Robert Osborne. When he resigned in February, the official line was that he had put most of the programme in place and wanted to pursue other interests. The truth was more complicated. Osborne declines to comment but sources close to him suggest he was unhappy at what he saw as the DfES’ stifling of activity.
Partnerships for Schools is supposed to be an arm’s length body, the stakes equally split between the DfES and Partnerships UK, the government’s adviser on PFI schemes. But despite the apparent equality, the DfES leads policy, which meant that at times it has held the power.
“The department effectively has the veto on everything,” says an associate of Osborne. “It has the power to slow down everything – it was like a 600 lb gorilla on Osborne’s back.”
A DfES source acknowledges the problem, but insists that Osborne was simply not suited to the role. “He underestimated the political process within Partnerships for Schools. It’s always going to be complicated – we deliver policy; Partnerships UK’s aims are slightly different – it takes a longer-term public investment view.”
Because the two bodies have different approaches, the schools partnership needed a leader who could make them sing from the same hymn sheet.
After Osborne quit, Goldstone was seconded from Partnerships UK, where he was finance director. Having already set up the NHS’ Partnerships for Health organisation, he is said to be as close to being a civil servant as you can get without actually being one. And, with extensive private sector experience behind him at PricewaterhouseCoopers, it was thought he could combine the efficiency of the private sector and the political awareness of public.
Osborne admits that Goldstone is the perfect candidate. “I think Goldstone is a good bloke and is as good as anyone to do it,” he says. “There are certain to be frustrations in implementing such a complex job.”
These “frustrations” were apparent as soon as Goldstone stepped into his new office in Duncannon Street, near London’s Charing Cross station. Industry capacity and funding issues were undermining the programme.
Councils had been asked how much new-build and refurbishment work they wanted for their schools. The anticipated reply was a 50:50 split, but in fact the councils wanted about 75% new build – far too much for the industry to handle. Goldstone had to set new parameters, and in July made the decision to cap new build at 50%. Since then, in a series of discussions with councils he has had to manage down their expectations, a job he has almost completed.
The department has the veto on everything. Iit was like a 600 lb gorilla on Osborne’s back
Despite this reduction in the programme’s ambitions, Goldstone remains positive. “I think it’s great that we’re going to get half the schools estate across the country rebuilt,” he says.
The exercise has made the programme more affordable. The schemes are supposed to use a variety of procurement routes, but new build often leads to the use of the PFI.
At one stage, this would have meant that £1.5bn of the £2bn spent on the programme each year could have gone on PFI, which would have also required a 10% input – £150m – from the equity market. But the equity market was unlikely to provide that much cash. Even now investment bank Morgan Stanley is trying to determine whether there will be £100m a year available.
Goldstone and his team have spent the past few months explaining this to authorities. “We have been working with each of the authorities,” says Goldstone, “to establish what is affordable for the programme and still meets their educational requirements since the end of July.”
Yet despite Goldstone’s insistence that the programme is proceeding smoothly, uncertainties remain. First, the overall capacity issue is still thought to be a problem – the Treasury is currently undertaking a review to find out how big it is. Even if the capacity is adequate, the government has a history of underspending its capital investment budgets.
More specifically, there are worries in the industry as to whether the education plan will hit its four objectives, set out in a consultation document issued by Partnerships for Schools in August. These cover design quality, cost efficiency, timescale and procurement costs. CABE and the RIBA have expressed concern about the first issue, despite the eye-catching designs in Schools for the Future. The two bodies are calling for architectural advisers to be appointed at each of the Local Education Partnerships that will be overseeing procurement. The DfES has yet to make a decision on this. The other three objectives depend on how the pathfinder schemes, led by a Bristol project, perform when they are put out to tender in the coming months.
Finally, there is still widespread confusion over just how the programme will be managed. One education contractor tracking the venture puts it like this: “You speak to Partnerships for School and they are clear that they want commercial partners to work in consultation with local authorities and that they will be in the middle between the two. Then you speak to the local education authorities and they say ‘No, no, no. Yes there will be funds from local government for this but we are going to be in control of this process.’ It’s difficult to see how it’s going to work with two such different viewpoints.”
A source close to Partnership for Schools admits that there is tension between central and local government, but says this should be resolved in the first few pathfinder schemes. “It’s one of the big challenges for the programme,” he says.
With all the challenges ahead there will be plenty for Goldstone to contend with if he is to pass the first part of his exams by next year.
David Goldstone’s CV
Goldstone spent 10 years working in public sector audit and financial advisory roles prior to working on the development of the PFI market in 1995. He worked with the Audit Commission and later at PricewaterhouseCoopers.
In 2001/02 he set up Partnerships for Health, a joint venture between the Department of Health and Partnerships UK, a PFI consultant. This decided to use the NHS’ LIFT procurement model for small-scale contracts. After this he returned to Partnerships UK as finance director.
In February he was seconded again, this time to Partnerships for Schools as acting chief executive. By early next week he is expected to be announced as the quango’s permanent chief executive.