22 This report focuses on the efficiency and economy of procurement under BSF as it is too early to measure BSF's effectiveness in improving the quality of education. The main challenges to securing value for money revolve around increasing the pace of delivery; securing adequate cost assurance; and managing relationships in a complex delivery chain, requiring buy in from a wide range of public and private sector parties.
23 Original expectations of how quickly schools could be built were overly optimistic. PfS will find it very challenging to include all 3,500 schools in BSF by 2020. To do so, it would need almost to double the number of projects in BSF over the next three years.
24 The cost of the programme has increased by 16 to 23 per cent in real terms to between £52 and £55 billion, in large part because of decisions to increase its scope but also because of increased building cost inflation. The Department and PfS have taken measures to help control capital costs so that BSF school capital costs are similar to most other school building programmes and cheaper than Academies built before their integration into BSF.
25 Achieving value for money through a LEP requires cost savings over the expected ten-year flow of projects to offset high initial costs. Procuring a LEP takes a long time and is costly. Costs have been higher than they need be (£9 million to £10 million to procure a private sector partner and design the first projects) and can be reduced for LEPs procured in future. There is some early evidence that LEPs can lead to time and cost savings once they have been set up, but very few Local Authorities have reached this stage. Contractors' ten-year exclusivity for developing projects within the LEP is a potential challenge in maintaining effective cost control and realising cost savings, requiring effective use of benchmarking, continuous improvement targets and market testing to gain assurance on the value for money of each project.
26 National coordination by PfS has brought benefits to the programme. At the local level, there is evidence that the benefits of strategic funding and central programme management are being achieved in many cases. Achieving the potential long-term partnering benefits through the complex LEP model requires clear responsibilities, accountability, commitment and buy in from all parties.