The cost of BSF schools

2.18 The prices of individual BSF schools are similar to those of schools procured through other routes. The Department requires PfS to collect comprehensive data on the cost and price of schools. PfS's benchmarking system is a significant improvement over previous programmes and will allow Local Authorities to gain better assurance on the value for money of the schools they are procuring. But projects have been slow to provide data, and PfS has not yet collected enough on their whole life costs to enable us to come to a firm judgement on the projects' overall value for money. There is also limited data on schools procured through other routes to provide ready benchmarks of all aspects of their costs.

2.19 The prices of BSF buildings have been kept under control by the funding arrangements put in place by the Department and implemented by PfS. These place the cost of increasing the scope of school projects with the Local Authorities and require them to keep projects affordable. The cost of building a school varies greatly depending on the size, location, type of site and facilities included. The prices of new BSF schools average £1,850 per square metre⁵ and range between £1,300-£2,600 per square metre, at January 2007 prices and after adjusting the costs for regional distribution. In comparison, the prices of Academies built before their procurement was integrated into the BSF funding regime averaged £2,240 per square metre⁶ and ranged between £1,600-£3,000 per square metre. These prices include all capital costs, fees, abnormals (unusual features such as flood defences), external landscaping, and furniture and equipment. They exclude VAT and ICT. There is no statistical difference between the average price of BSF schools and PFI schools built before BSF was launched. The prices of schools procured through other routes are not collected centrally.

2.20 Figure 13 shows the spread of the price of BSF schools compared to PFI schools and Academies built to date and that Academies are generally more expensive than the BSF or PFI schools.

2.21 The prices of new PFI BSF schools are fixed in the contracts. Prices do not therefore change over the construction period (except under exceptional circumstances such as the Local Authority breaching the contract). Local Authority costs can change considerably when fixed price contracts are not used. Our 2007 report on Academies found cost overruns ranged from 0 to 35 per cent and averaged 9.5 per cent for the first 26 Academies.⁷ Fixed price contracts do not guarantee the best price, however, as the contractor will reflect the risk of cost and time overruns in the fixed price.

2.22 The price of BSF refurbishments, delivered through design and build contracts, are either fixed in the contract or set as targets with an element of sharing of cost variations, depending on the contract chosen by the Local Authority. Prices also vary depending on the proportion of the building refurbished. Our cost analysis above is therefore limited to new build schools.

2.23 PfS will undertake post occupancy reviews on each school a year after it has opened. Until these take place, it is too early to say whether the school designs, build quality or facilities will meet expectations. BSF schools have been built to higher specifications and space standards than previous schools.

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5 £1,740 to £1,940 per square metre at 95 per cent confidence intervals.

6 £2,160 to 2,300 per square metre at 95 per cent confidence intervals.

7 The Academies Programme, National Audit Office, February 2007, HC 254 2006-07.