ppp header

Glasgow Schools

Category: Schools

"One of the biggest advantages of choosing the PFI route is the competition you get between the various bids. Normally when procuring as a council you hire in people to design and construct the buildings but if anything goes wrong it costs you."

John Curley, Senior Education Officer, Glasgow Council

September, 2004

Glasgow is proud of its history of innovation. The number of inventions to come out of the city includes radar, the rotary engine, fingerprinting and the fountain pen. It's hardly surprising then that when the council needed a radical solution to update its school buildings it turned to the relatively new Private Finance Initiative but developed it into the first grouped schools project.

The PPP Forum interviewed John Curley, Senior Education Officer, Glasgow Council.

"The problem in Glasgow was that for years the population had been dropping and the schools had become more and more run down. Some were so bad that all the money we were spending on them was simply keeping them up to basic health and safety standards and we couldn't afford the improvements they desperately needed. On top of that we realised that although we had plenty of school places, many of them were in the wrong place as the demographics of the City had shifted the population. What we needed was a fresh look at the whole estate rather than a desperate scramble to keep each building going on its own."

The council decided to look to the private sector to provide that fresh approach. First they needed to rationalise from 39 down to 29 secondary schools.

"We decided on the rationalisation before looking for a funding solution so the school system actually got worse before it got better. We wanted people to be settled in the schools we were going to keep before going ahead with the rebuilding and refurbishing. So we had to be very careful to take everyone with us from the pupils to the parents, from the teachers to the politicians. One of the huge advantages we had was that the Council agreed that all the savings from the school closures would be reinvested in education. That gave us an extra £8 million to spend on the children. This was a huge undertaking by the council who stood firm in the face of sometimes fierce union opposition."

As one school had already been recently rebuilt, the PFI project involved building 11 new schools and refurbishing a further 17 at a cost of 1.2 billion pounds over 30 years. It was a huge undertaking and one of the side effects was to create a huge boost to employment in Glasgow. Two thousand extra tradesmen were needed over the two years of the construction phase.

"One of the biggest advantages of choosing the PFI route is the competition you get between the various bids. Normally when procuring as a council you hire in people to design and construct the buildings but if anything goes wrong it costs you.

All we had to do in this case was give a broad output specification and the consortia had to come up with the design and innovation to deliver that output. It was one of the companies bidding which showed us that it was as cost effective to rebuild some schools as it was to refurbish them so we actually got a lot more brand new buildings that we expected for the same price
."

That winning bid came from 3ED which was then owned by The Bank of Scotland, The Miller Group, and Amey. Amey has since sold its equity stake to Equion, a division of John Laing plc, but they retain the FM and maintenance contract. The initial capital investment of £220 million over the first 2 years was used to refurbish and/or extend 19 schools, build 11 new secondary schools and 1 new primary school and to invest in over £15 in new ICT.

"The consortium came up with a neat solution for the new build schools which they called "pitch and ditch" Basically they built the new school on the playing fields then moved everyone across and knocked down the old school to build new sports facilities. Of course, during this time the children still need sports lessons but it was 3ED who had to provide transport to neighbouring sports facilities as they were responsible for the decant. The children are really proud of their new facilities and treat them with respect. Vandalism used to cost us around a quarter of a million pounds a year, now that's down to less than £80,000."

In another radical move the council made the raising of educational attainment and improvement in attendance part of the PFI contract. Five per cent of the payments can be withheld if there are no improvements in these areas. But John Curley admits that two years into the project there are still problems in some areas. There are issues with the ventilation systems and the design of the schools has unexpectedly provided nesting places for pigeons.

"These are not our problems, they belong to 3ED and they have to sort them out. There's a cost for removing the pigeons and cleaning up after them but that's their risk. And if it's not done then we have a robust penalty deduction mechanism and have used it, that's what it's for. But in general we're pretty happy with the way the buildings are looked after. The council has its own audit and monitoring team to look at cleaning and FM in general so we keep a close eye on things and we set very high standards. But you have to remember that when we did the cleaning ourselves it was no better and then we had no way of imposing financial penalties if things weren't up to standard so we're in a better position now."

So are there any lessons the council could pass on?

"The PFI works well as long as you get the output spec correct. You don't sign off on the plans you sign off on the output spec. Also you have to get as many people involved as early as possible. Right from the beginning a group of heads had a confidential look at plans of each bidder. When it got to 2 bidders all the heads saw the documentation for each school. For 4 weeks people wrote their comments, judging against the criteria, and eventually we picked overall winner.

You need to be sensible in partnership. You shouldn't expect to win every argument but you shouldn't expect to lose them all either
."