Q11 Chairman: Can I look at your bonuses? If we look at figure 20 on page 36, 70% of your bonuses are paid to you for delivering milestones but only 30% for delivering really good quality schools. Obviously the PAC will have to return to this issue in the next Parliament. There is no point in just building for the sake of building. We want to have good education. Is not the whole bonus structure rather tilted just to delivering government targets rather than delivering good quality education?
Mr Bell: I do not think it was unreasonable to have such a focus on the delivery of projects. We have to continue to keep that within the overall performance framework. We accept however the recommendation in the Report that we need, to use the Report's words, a smaller number of categories within a dashboard which should take account of the progress against delivering milestones but also the quality as well as the educational outcome. I would not suggest up to now that we have been unmindful of quality. One of the distinguishing features of this programme is such a strong emphasis on the quality of design. In relation to the educational outcomes, we already have established a set of outcomes that we want to measure these projects by. I do not think any of us would argue that simply putting up a brand new building is going to improve the quality of education but, on the back of this investment, we should be seeing improvements. Therefore, we will have a smaller dashboard. It will take account of delivery of projects against milestones, quality of design and build and the educational benefits.
Q12 Keith Hill: The NAO tells us in paragraph 15 on page seven that the early evidence is that the Local Education Partnerships can lead to faster, more cost effective procurement for school projects. That is presumably in part because the developers are keen to outbid the competition. As you know, the Local Education Partnership gives the contractor or developer exclusive rights on schools developments over a ten year period. That is a local monopoly. How can you justify that?
Mr Byles: It is not a local monopoly, although some aspects of it could appear like that. The exclusive right to develop all schools in a local authority area is the competition that people enter into at the point of procurement, but there are several tests through the life of the Local Education Partnership to make sure that value for money is being maintained, not least through the use of the benchmarking system which we have introduced, which has already been very valuable for having real time cost information propositions that can be tested against. In the light of the LEP, there is also the opportunity at least at year five, for market testing in competition of the construction elements of the scheme. In the case of an "integrator" project, the kind of project arrangements that we have in Kent for example, that construction competition can take place for the delivery of every single school. It is not a single monopoly for the life of the project. There are a number of different tests which can be applied through the life. Each Local Education Partnership signs up for continuous improvement targets. In the case of Bradford, the one that springs to mind, there is a 3% improvement in costs each year.
Q13 Keith Hill: You obviously rely fairly heavily on the issue of benchmarking but if you look at the NAO's recommendation (ii) on page nine and also at paragraph 2.18, it is pointed out that the projects have been slow to provide data and that Partnerships for Schools itself has not yet collected enough data for example to enable a judgment on overall value for money. When are you going to have this national benchmarking data adequately in place?
Mr Byles: We are taking on that data right now. We have cost information from 21 local authorities at the moment. We recognise the point that the Report makes about speed of collection. Indeed, all Local Education Partnerships now give us that information within one month of producing it. The pace of gathering this information has very significantly increased.
Q14 Keith Hill: If I can go back to basics, on the whole, this is a pretty wonderful programme. This is a pretty positive report from the NAO and PfS and their view is evidently that this has been something of a success. If one wanted to make a criticism of the programme, it is that it has been quite a lot slower than initially predicted. Why has the time frame of the programme slipped from between 10 and 15 years, as was announced in 2003, now to 18 years?
Mr Bell: There is a variety of reasons for that which the Report highlights. The assumptions were over optimistic. Whilst rightly starting work in those authorities that had the poorest educational outcomes, they under estimated the capability of those authorities to get the schools up and running. They also under estimated some of the national dimension of this work. The Report rightly points out that even getting aspects of the national funding structures organised did not happen. I think we take that one on the chin, as it were. Where we started was over optimistic. A plea in mitigation on this really has to do with all the variables in play. This is the most substantial schools building programme probably since public education started in the 19th century. We have an extended programme. We have every secondary school involved in some way or another. We have local authorities and the private sector involved, different streams of funding and so on. Whilst the ambition and the aspiration of the targets that were set off from were understandable, perhaps on reflection we were over optimistic, given the complexities.
Q15 Keith Hill: I accept what you say about the general benefits of the scheme. After all, I am a Labour MP. I have five secondary schools in my own constituency which are all benefiting from this. I agree it is a great programme but it is a bit odd that way back in 2004 your department assumed that local authorities would take only six months to develop robust strategies and also, at the same time, you assumed that local authorities could procure Local Education Partnerships quicker than the quickest ever school private finance initiative. How on earth could you have allowed such unrealistic assumptions to be made?
Mr Bell: It was, at that point, naively over optimistic. I do not think there is any point in trying to pretend otherwise. However, quickly after we recognised that those original targets were not going to be met, we restructured and reorganised the timetable in late 2004/early 2005. Against that revised timetable, we are now on track. That is why I could answer the Chairman confidently when he asked me about the end point of the programme.
Q16 Keith Hill: Who was giving you your advice at that time?
Mr Bell: Officials were looking at what was going on. Local authorities, it has to be said, were very keen to get up and running with this programme. Everyone was just buoyed up by that great opportunity that building schools for the future presented. Do not forget too that we were not doing this on our own. We were working alongside Partnerships UK. The lesson to learn is that when you are doing something of this scale, scope and complexity you should really test all your assumptions greatly. I do not think in the end it is going to have made a massive difference. In other words, I think we are still going to end up with a really good product as we go through this programme, but it still is pretty important to recognise that by the end of this year we will have 91 new schools open. Then it goes up to 161 and it is 200 the year after that.
Q17 Keith Hill: This kind of super optimism at the beginning of programmes is not unique to DCSF. It is something that we as a Committee constantly confront in looking at various departmental programmes. What is it about the ethos of government which leads to such unrealistic planning assumptions?
Mr Bell: The Report recognises that although the total cost of the programme has increased that is largely down to the scope of the programme increasing and buildings cost inflation. Where that kind of over-optimism really starts to matter is where costs run out of control. The way we have constructed this programme is such that the risk and the cost controls lie at the local authority level. I think it avoids some of the dangers of that over optimism we see on other projects. Why does it happen more generally? I suppose there is a natural enthusiasm to see projects implemented as quickly as possible but, from our perspective, this is a really good example of where you should learn on a major project implementation and not over promise and under deliver. It is better to under promise and over deliver than the other way round.
Q18 Keith Hill: You suggest that maybe the officials ought to have on their walls the motto from that American television programme: "Curb your enthusiasm."
Mr Bell: Enthusiasm is a good thing. I think you and this Committee would be concerned if there was a lack of enthusiasm for implementing the policies of the government of the day as civil servants should be doing but equally we have to temper that in providing the right kind of advice to ministers so that we do not allow our enthusiasm and their enthusiasm not to be realised in practice, because we end up in this kind of situation where you are asking us why we did not deliver against those over optimistic targets to begin with.
Q19 Chairman: On curbing enthusiasm, perhaps I can ask the Comptroller and Auditor General: you published a report this week on lessons to be learned across departments. We come across this again and again as a Committee. I do not understand why somebody does not just have written in red ink all over these new programmes, "Curb your enthusiasm. Just go a bit slower."
Mr Burr: I do not think we used that phrase in the Report. I think we used the phrase "helping improve the uptake."
Q20 Chairman: Can we learn lessons across Whitehall about what you have been asked over the last ten minutes? It must have been apparent to you that these objectives were just wildly over optimistic. I do not want to criticise Mr Byles, because it is not fair.
Mr Bell: One of the things-I think the Report recognises this-that Mr Byles has done since taking over the leadership of Partnership for Schools is to really get us more into line against the objectives that we set. At a point where it as looking a bit uncertain, Mr Byles has brought us the kinds of disciplines and leadership to the programme which are very valuable.