4.7 In general, the outcomes of applying a PPP mechanism to the focus group of five Pilot Schools are positive overall. A higher level of investment, both as the initial input and maintenance throughout, has shown that the schools are likely to be designed to a marginally higher standard, in a better condition throughout and remain usable for longer, thus retaining a higher residual value.
4.8 Nevertheless, the initial capital required to design and build the schools, as well as continuous funding over the lifecycle of the assets can pose a challenge for new establishments. In the case of Pilot PPP Schools Bundle, the transaction costs were materially higher than those for the Conventional Schools, but not delivering a substantial increase in value for the users.
4.9 The group of Pilot PPP Schools analysed in this Review was delivered in 2002 and is a first project at such scale to have been executed; as such, there were no other projects available at the time to compare the progress or align the outcomes. In the last 18 years since the launch of Pilot PPP Schools Bundle the market has matured, bringing more information and depth of experience to how such projects should be managed. Any future PPP schemes should take the lessons learnt into consideration in order to further benefit from applying the partnership model of financing.
The maturity of the project also provides better understanding of the procurement mechanism impact over a longer period of operation. In this instance several lessons can be learnt in respect of managing transaction costs, the value of strengthening maintenance of Conventional Schools to ensure they meet Statutory Requirements and in challenging the Operational Costs presented at the bid stage by PPP consortia to ensure they offer value for money.