Partnerships for Schools

4.1  The Department established PfS to manage the delivery of BSF. PfS is an incorporated Non-Departmental Public Body (NDPB) owned by the Department. It employed 114 people, 100 full time equivalents, as at 31 December 2008. To encourage a commercial culture and an incentive structure that promoted delivery, the Department invited PUK to share the funding and management of PfS. An Oversight Board, made up of non-executive directors, holds PfS to account for fulfilling its aims and objectives. PfS's day to day operations are the responsibility of the Chief Executive, who is a former Chief Executive of Norfolk County Council, and four members of the senior management team.

4.2  PfS has helped achieve a high standard of programme management. It provides national leadership through making the Chief Executive accountable for delivery. Having a single body accountable for delivery also improves the chances of success. It has attracted specialist staff who would have been difficult to recruit and employ within the Department, increasing the programme's procurement and monitoring capacity. It has also exercised effective control over the overall scope, flow and cost of the programme in a way that could not be done by individual Local Authorities. We set out a fuller commentary on PfS's performance in Appendix 2.

4.3  PfS is also helping to learn and disseminate lessons from individual projects across the programme. It has undertaken major reviews of the early projects, its systems and processes, contractual terms (including standardised documentation), and procurement guidance and processes. It facilitates networking between Local Authorities in procurement.

4.4  PfS's staff are awarded bonuses of up to 20 per cent of their salary based on their performance, with the overall size of the bonus pool set on the basis of PfS's performance against its corporate targets. Although PfS uses its reviews of Local Authority plans and the guidance it gives Local Authorities to emphasise the importance of the quality of the schools being built, its corporate targets over-emphasise the timeliness of delivery (figure 20 overleaf). The Department and PUK are developing an additional set of quality performance indicators to use in future.

4.5  The overall cost of managing the programme across PfS and the Department is £20 million a year, 1 per cent of the programme's annual budget. Although comparisons are not straightforward, this proportion is broadly similar to comparable programmes (figure 21 overleaf). The comparator bodies all administer central funding for programmes that are delivered by devolved local bodies, although the exact make-up of the funding and activities differs. The central running costs for the Academies programme, for example, also include the cost of finding and managing the relationships with sponsors and supporting opened academies to continuously improve performance. The Department has a greater role in the delivery of BSF than the sponsor departments of the other NDPBs so figures for the Department as well as PfS are given in the table.

4.6  PfS has relatively high staff costs per employee compared to the Department and other public bodies, reflecting its efforts to recruit highly qualified staff and a mix of experience and skills from the public and private sectors. The Department also maintained 15 staff up to 2008 to establish the programme, but has now significantly reduced the number of staff working on BSF.

4.7  The Department and PfS have been heavily dependent on consultants to establish the programme. They spent £11.1 million up to March 2008 (20 per cent of total central administration costs) on private consultants. PfS has used consultants to develop standardised contracts and tendering documents and to review the procurement process and operational issues. The Department has commissioned PwC to undertake an independent annual evaluation of the effect of the programme on educational outcomes. Now the programme is underway, the budgeted central expenditure on consultants is £2.5 million in 2008-09 and is expected to be £1.6 million from 2009-10 onwards, including £0.4 million a year for the annual evaluation.

4.8  The Department has also relied on consultants to provide it with commercial expertise. In one case, the Department paid KPMG £1.35 million over three years for the delivery of corporate finance services that were provided by one individual. Had the Department known that it would need this commercial expertise for such a long period of time, it would have been more economical to have used secondments.