Construction in the education sector is complex, with clients and funding taking a variety of forms. But the extra education spending promised by the government is materialising, and the sector promises strong growth. In this latest cost model, cost consultant Davis Langdon & Everest examines school building costs and tackles the issues faced by contractors wanting to go back to school.
Renewal of the public education system is a key policy of the government. Additional capital finance has been found for schools, but the need for investment in buildings must compete with demands for more teaching resources, equipment and information technology systems. Another factor to be considered is an unmet requirement for specialist teaching space required by the national curriculum.
In this cost model, Davis Langdon & Everest examines the costs of a range of school building types required to serve the 11-19 year age range. We also look at the funding complexities, particularly for institutions outside the control of local education authorities, including the potential for lottery and public-private partnership funding for schools projects.
Ambitious pre-election pledges by the Labour government to place education at the top of the agenda have been backed by real increases in capital funding. The ‘New Deal for Schools’ announced in the July 1997 budget will direct £1.3 billion towards school capital expenditure over the lifetime of the government, and the Department for Education and Employment announced £922 million in credit approvals for 1998/99 in December 1997.
The scale of the problem in the state school sector is immense. The total cost of the backlog of repairs is estimated at £6 billion, and investment is necessary for the disposal of more than 800,000 surplus places. Resources are also required to meet the needs of the national curriculum and reduce class sizes.
Schools and colleges operate in a highly competitive environment. Recurrent funding, which includes allowances for equipment purchase and repair and maintenance work, is allocated to schools and colleges in accordance with student numbers or the quantity of courses taught, creating circumstances where, under parental choice, the more successful institutions can increase student numbers, reduce per capita running costs and improve their use of resources. Money is restricted across the sector, with year-on-year efficiency savings being required by the Treasury and competition stiff for project funding.
Priorities for capital investment
Where capital investment for new build construction is available, priority areas for development include the provision of additional ‘basic’ places to meet an increase in demand for education in areas of population growth, major repairs related to health and safety requirements, improved facilities to meet national curriculum needs and ‘spend to save/spend to earn’ schemes designed to reduce pressure on recurrent funding.
One impact of the requirement for efficiency savings has been an increase in the intensity of the usage of school buildings. Greater numbers of students have been accommodated through increased class sizes, maximisation of classroom utilisation and reduction of teacher/student contact time. However, classroom sizes and capacity constraints can physicall prevent schools and colleges from meeting total demand for places or optimising existing resources. Higher usage also greatly increase wear and tear on the building fabric and results in higher repair and maintenance costs.
Additional revenue generation, through activities such as adult education, has also become important for schools and colleges. However, this depends, in part, on being able to provide good-quality, dedicated accommodation with associated social and catering facilities.
Background organisation and management of schools
Local education authorities currently own and operate 3,845 secondary schools. At least 85% of recurrent funding is delegated to schools under the Local Management for Schools (LMS) policy. LEAs own and operate voluntary controlled and special schools, and also maintain ‘voluntary aided’ schools, where the buildings are typically owned by trustees such as local churches.
There are 1,136 grant-maintained schools in the primary and secondary sectors. These own their premises and employ their own staff. They benefit from a high degree of autonomy and are allowed to carry forward savings on current expenditure or maintenance budgets in order to fund capital projects.
Sixth Form Colleges and Further Education Colleges operate independently of LEAs, mostly as incorporated, autonomous institutions. Recurrent and capital funding is sourced from the Further Education Funding Council (FEFC). The range of subjects taught in Sixth Form and Further Education Colleges is broad, with institutions offering 30 or more A level subjects. Given the breadth of subjects taught and the resources required, specialist colleges provide a very effective means of delivering further education.
Although the component parts of school buildings are relatively simple, the design challenge presented by the education sector is considerable. The lack of recent substantial investment in schools means that there are few established models of contemporary secondary school design. Some of the key issues that need to be resolved include:
- the provision of an appropriate, secure environment to encourage learning and to improve standards of education
- the organisation of teaching and non-teaching spaces in order to facilitate the management of school
- the minimisation of surplus floor area in school developments in order to maximise the net benefit of public investment and to minimise recurrent costs associated with property
- design to minimise energy, repair, maintenance and other whole life costs.
Achieving a balance between these factors is complex and should ideally be considered on a whole life basis. . Schools and colleges require a range of different types of teaching and support space. As streamlined ‘resource based’ and IT-based learning methods are adopted, teacher-pupil contact time and total space requirements have fallen, whereas requirements for a more diverse range of classrooms, resource centres and other facilities have grown. The space requirements of sixth form colleges are particularly varied. In existing buildings, the size and variety of available teaching spaces may be a significant constraint upon expansion of student numbers.
The key environmental issues governing the design of schools are acoustics, lighting design, thermal performance and levels of ventilation. Basic performance requirements are set out in the 1996 version of the Schools Premises Regulations. The performance standards set out in the regulations are not high, but the achievement of an appropriate balance of day lighting and control of solar gain in classrooms is a key issue. Mechanical ventilation is not generally required. Design guidance is also given in Building Bulletin 87, Guidelines for Environmental Design in Schools. The Bulletin includes recommendations on lux levels, levels of day lighting, use of solar control measures and the application of services controls.
School accommodation needs are driven by the curriculum. Building Bulletin 82, ‘Area Guidelines for Schools’ sets out non-statutory guidance for the provision of teaching and non-teaching space for schools. It also provides a mechanism for calculating the space requirement of schools based on their size and the curriculum taught. Indicative gross floor areas for a range of secondary school sizes are given in the table (above left).
Timetable space needs
The development of the national curriculum has introduced further requirements in secondary schools for specialist space to accommodate the compulsory teaching of sciences and design technology. The introduction of IT in the classroom has also resulted in the need for larger rooms to accommodate workstations. Where possible, the provision of large general classrooms, 20 to 30% larger than the standard size, is recommended on the basis of a ratio of one large room for every four or five standard rooms.
Teaching space typically takes up 57-60% of the total gross floor area of a school campus. The remaining 40-43% is taken up by administrative accommodation, lockers and washrooms, storage, catering and circulation. The proportion of teaching to non-teaching space will vary. The table (left,) gives a breakdown of the proportions of non-teaching space. The extent of circulation is largely governed by the arrangement of classrooms. In most cases, circulation cannot be used for teaching or social activity without causing congestion.
Non-timetable space requirements
Additional non-timetabled teaching spaces include a main hall, library resource centre, supplementary teaching spaces and study areas. Library and other local resource centres also typically provide space for IT workstations, quiet study areas and careers information. The typical total requirement for central and departmental resource areas for a 1,200 pupil school will range from 230m2 to 300m2.
Despite the substantial increases in capital funding for schools that have been pledged by the government, additional private sector funding is essential if education facilities are to be improved. The education sector presents real barriers to the introduction of public/private partnership funding on the basis of a Design, Build, Finance, Operate route. Only one school project, Colfox School in Dorset, has been procured using DBFO so far.
Local education authorities fund school capital programmes with loans backed by credit approvals given by the DfEE, from other local government resources and from capital receipts. It is planned that LEAs will be the clearing houses for ‘New Deal for Schools’ funding (NDS), appraising and prioritising applications before final approval by the DfEE. LEAs will also be responsible for the ‘bundling’ schools projects into schemes with sufficient capital value (£15-20 million) to attract public-private partnership funding. Voluntary Aided schools receive 85% of the cost of approved capital projects from public funds. Funds are allocated and projects administered by LEAs. Grant-maintained schools receive funding from the Funding Agency for Schools. These schools have to pay VAT where applicable and do not benefit from the scale economies of LEA services, such as centralised purchasing of equipment. Capital funding is strictly limited, £127 million being available for 1998-99. Grant-maintained schools also have to contribute to the cost of much of the work eligible for Funding Agency for Schools finance. However, they are not allowed to borrow extra funds for capital projects.
Following incorporation in 1993, Sixth Form and Further Education Colleges have a high degree of independence within a strategic national framework for the expansion of non-compulsory post 16 years education. Funding is obtained from the Further Education Funding Council. Colleges are also able to borrow to fund projects against the security of Exchequer-funded assets. Further Education Funding Council grants can be used either as capital or as an income stream to service loans. No college receives 100% support for a project and the level provided by the council varies in inverse proportion to the ‘unit cost’ of education used to calculate recurrent funding. In practice, the proportion of project costs covered by Further Education Funding Council grants can be lower than 40%, and as a result, alternative private sources of funding are essential.
Public/Private partnership funding
There are opportunities for public-private partnership projects in the education sector because of the substantial capital assets controlled by LEAs and schools, and because of the potential for a continuing service element related to facilities management services.
Projects that reduce running costs, unlock the value of existing assets or generate additional income are being considered. However, the small scale of many capital projects, the complex administration of schools and the effect of privatisation of many support services means that schools are not always an attractive private finance opportunity.
Issues related to the powers of LEAs to enter into private finance deals were dealt with by the 1997 Local Government (Contracts) Act, which confirms the powers of Local Authorities to enter into public-private partnership agreements and compensates if such deals are set aside following a legal challenge. However, the status and long-term financial security of voluntary aided and grant-maintained schools as clients is less certain. Most private finance deals so far have involved share-use schemes of land swaps related to residential development.
Lottery funding has been a welcome source of additional funds for sports and arts related projects. It is unlikely that lottery funds will be directed towards a schools reconstruction programme. Lottery funding qualifies as ‘private’ funding for projects financed by the Funding Agency for Schools and Further Education Funding Council, whereas public sector capital grants also qualify for the matching funding element required under lottery rules. In practice, other sources of matching funding from college or public sources may be needed to unlock lottery monies. Lottery-funded schemes need to be targeted at local community as well as school needs.
Responsibility for procurement and management of the schools construction programme remains largely with LEAs. However, the transfer of estate management responsibilities to grant-maintained schools and sixth-form and further education colleges has created a group of construction clients that do not have direct access to the management resources of the LEA. Construction projects can be a significant drain upon the management resources of a school or college. The appropriate procurement route should ensure that the end user has sufficient influence to be able to obtain the right project without being overburdened by administration. Given the strict limitations on capital funds and fixed timetables that characterise schools projects, education clients emphasise cost and time certainty and value the ability to transfer these risks to the contractor. Lump-sum contracts particularly suit the requirements of the education sector. Early advice is important for these projects, both in connection with the project appraisal requirements of the funding bodies and the co-ordination of multiclient schemes involving combined public and private investment.
Furniture and equipment
The furniture and equipment needs of schools and colleges can typically add 15- 25% to the total cost of a schools construction project. Furniture and equipment needs are determined by the requirements of the curriculum but are also influenced by available resources. Furniture and equipment expenditure typically falls into four categories:
- Fixed Furniture - Benches, cupboards, white boards etc.
- Loose Furniture - Tables and chairs etc.
- Fixed Equipment - Hard wired equipment to Craft and Technology areas.
- Loose Equipment - IT hardware, Audio Visual equipment and so on.
IT systems are typically the largest single item of furniture and equipment expenditure and computer/pupil ratios are particularly variable. Recent research published by the DfEE has identified cost ranges for furniture and equipment for teaching and ancillary areas. The table (right) sets out indicative furniture and equipment costs based on DfEE data, with price levels updated to 1st Quarter 1998, adjusted for a location in South East.
VAT paid on publicly funded schools projects can generally be recovered by the LEA. However, grant-maintained schools and further-education colleges are potentially liable for VAT. New build, detached teaching buildings are zero-rated for schools and colleges with charitable status. But extensions, refurbishment projects and on-costs, such as professional fees, are standard rated for VAT.
In order to clarify issues of VAT liability, it is good practice for projects to be designed as physically separate units. However, the introduction of private funding and commercial activity into schools and colleges has blurred the boundaries of what constitutes an education building. Zero-rating may introduce significant restrictions on the uses of a building. Where a ‘mixed-use’ scheme is proposed, the balance of standard rated VAT can be negotiated with Customs & Excise using as the basis for an apportionment, for example, available hours for teaching and public use.
The cost model details the costs of a number of distinctive school building types, focusing in particular on the costs of a conventional classroom block and technology block. Summary costs are also given for a performing arts facility and a sports hall suitable for shared school and community use. The cost breakdowns are based on a range of recent schemes and feature both framed and conventional construction. Floor areas and costs per m2 of the model schemes are shown in the table (left).
The performing arts building includes costs of sound and stage lighting installations, which add £108/m2 to the overall cost. Costs of enabling works, demolitions and external works are excluded. The unit rates are based on price levels current in the South-East during the first quarter of 1998. Pricing is based upon a lump-sum tender obtained in competition. Adjustments to the unit rates for other schemes should take into account locations, site conditions, programme and procurement route.
AcknowledgementsOur thanks go to the principals of Hills Road and Long Road sixth-form colleges in Cambridge, whose insight and assistance was invaluable in the preparation of this model.
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Published in Building 6 March 1998