Select Committee on Education and Skills Minutes of Evidence


Supplementary memorandum from Baroness Ashton of Upholland (DFES 09)

VALUE FOR MONEY AND SCHOOLS PFI

  PFI proposals supported by the Department are selected on the basis of the published criteria approved by Ministers. The four main areas of these criteria are:

    —  priority of accommodation needs; sufficiency (adequate number of places), condition of school facilities, suitability to deliver the current or future curriculum;

    —  furthering wider DfES objectives or policies, such as nursery provision or raising educational standards;

    —  furthering wider Government objectives, for example, reducing crime or transport pollution; and

    —  developing the efficiency and effectiveness of the use of PPP and PFI and procurement.

  Once initial approval is given to LEAs or schools to develop their proposal into an Outline Business Case (OBC) Value for Money becomes the prime determinant of whether the project should proceed via the PFI route. The authority is advised to consider value for money (VFM) at every stage in its planning and to seek advice if doubts occur. A formal assessment of VFM takes place when the OBC is considered by the Project Review Group (PRG), (an inter-departmental body that must approve all business cases for local government PFI projects). Prior to the actual signing of the contract, at the end of negotiations and before signing the contract, the Final Business Case also requires approval by the PRG. This will also involve a formal VFM assessment.

  VFM is assessed by comparing the total cost of the PFI project with the alternative, known as the Public Sector Comparator (PSC). The PSC is a means of costing the notional alternative of delivering the same project with; the same specification delivered over the proposed length of the contract, and the same level of risk transfer through conventional procurement. The elements of risk that are to be transferred to the private company are costed by specialist accountants and confirmed by the authorities own financial advisers.

  This comparison will demonstrate the total cost across the life of the contract, including all the lifecycle maintenance expenditure of buildings or other assets. If the cost of the PFI option is less than the PSC alternative a positive VFM case will have been determined. If not then the VFM case for proceeding with the PFI will not have been made.

  This process above provides a financial measure of cost and expected VFM. It does not determine any wider economic, social or educational benefits that might be of consideration when making a judgement on whether to proceed with a project procurement via the PFI or PPP route. The rules laid down by the Treasury Task Force, now managed by the Office of Government Commerce, allow these wider issues to be taken into account in VFM assessments. This means that it is possible for a scheme to be given approval to proceed on VFM grounds even if the narrow financial calculation described above does not demonstrate a clear VFM case. This situation has not yet occurred within schools PFI projects, where all of the 36 contracts signed to date have shown clear VFM over the PSC alternative. However, there has been strong evidence in a number of cases that could be used to support this non-financial assessment. For example, in the Stoke-on-Trent all school PFI scheme, the LEA calculated that over 600 jobs would be created in construction, maintenance and associated areas over at least a five year period. There is also now considerable evidence from headteachers of operational PFI schools that, once contracts are signed and teething problems at the start of operations are over, they are able to save a considerable amount of their time previously spent on managing the building and non-teaching services of their school. This has been estimated by heads themselves at between 10 to 30 per cent of their time. The value of this additional school management time, both in financial and educational terms, over a 25-30 year period would obviously be substantial. At present these and other "soft" benefits have not been used to justify proceeding with a schools PFI project.

  What is not yet available to support the assessments of VFM undertaken prior to procurement, is sufficient post-operational project data to evaluate and compare. The first PFI school has only been operational for two years and the great majority for less. It is not possible to look at assessments on a 25-30 year lifecycle calculation after such a short period and make meaningful comparisons. This Department, along with others, is considering with external partners and consultants how best to undertake useful studies at this stage, both to inform the current debate on the use of PPP/PFI and to find out if the expected VFM benefits have been gained in practice. In addition, both Audit Scotland and the Audit Commission are planning to undertake work into this topic across the wider local authority PFI field.

EARLY YEARS EDUCATION AND CHILDCARE: FUNDED ACTIVITIES IN ALL LOCAL AUTHORITIES

Nursery Education Places

  All LEAs are funded to provide a free early education place for all four year olds. All LEAs are receiving additional funding to expand free early education places for three year olds.

Early Education and Training

  All LEAs receive funding via the Standards Fund for training and development of staff working in early education settings.

  In addition to the Standards Fund, LEAs and their Early Years Development and Childcare Partnerships (EYDCPs) are receiving additional funding to support Foundation Stage training for practitioners working in the early years settings and to ensure national targets, set for achievement by 2004, are met. These include the involvement of one qualified teacher in every 10 non-maintained settings; four days training for all practitioners delivering the Foundation Stage, a SENCO in every early years settings and an area SENCO to support every 20 settings outside the maintained sector.

  NB: Selectively, Area SENCO Pilots are currently running in four authorities from September 2001 to March 2002. The pilot authorities are Lewisham; Rochdale; Northumberland and; Brighton and Hove.

Childcare Grant Funding

  All EYDCPs receive childcare grant to cover the cost of human resources, infrastructure, ongoing audit, the creation of childcare places, childcare place sustainability, SEN, Children's Information Service, training, childminder start-up grants, the creation of childminder networks and outdoor play equipment (for this year only).

European Social Funding (ESF)

  All EYDCPs receive funding via the ESF for specific projects: recruitment, training, childminder start-ups, childminder support, daycare expansion and toy libraries (including musical instruments).

  NB: For Partnerships classified as ESF Objective 1 areas the above projects are funded through the Childcare Grant instead of via ESF.

Name of Partnership
Sure Start
EECs
NNI
Nursery School Project
Wrap- around Pilots
Teenage Parents Pilot
Barking and Dagenham LEA
Y
  
Y
  
  
Y
Barnet LEA
  
  
Y
Y
  
  
Barnsley LEA
Y
  
Y
Y
  
  
Bath & North East Somerset LEA
  
Y
Y
  
  
  
Bedfordshire LEA
Y
  
Y
Y
  
  
Bexley LEA
Y
  
Y
  
  
  
Birmingham LEA
Y
Y
Y
Y
  
  
Blackburn with Darwen LEA
Y
  
Y
Y
  
  
Blackpool LEA
Y
  
Y
Y
  
Y
Bolton LEA
Y
Y
Y
  
  
  
Bournemouth LEA
Y
  
Y
  
  
  
Bracknell Forest LEA
  
  
Y
  
  
  
Bradford LEA
Y
Y
Y
Y
  
  
Brent LEA
Y
  
Y
Y
  
  
Brighton and Hove LEA
Y
  
Y
Y
  
  
Bristol LEA
Y
Y
Y
  
  
  
Bromley LEA
Y
  
Y
  
  
  
Buckinghamshire LEA
  
  
Y
Y
  
  
Bury LEA
Y
  
Y
Y
  
  
Calderdale LEA
Y
  
Y
  
  
  
Cambridgeshire LEA
Y
  
Y
Y
  
  
Camden LEA
Y
Y
Y
Y
  
  
Cheshire LEA
Y
  
Y
Y
  
  
City of London LEA
  
  
  
  
  
  
Cornwall LEA
Y
Y
Y
Y
Y
  
Coventry LEA
Y
Y
Y
  
  
  
Croydon LEA
Y
  
Y
Y
  
  
Cumbria LEA
Y
Y
Y
Y
  
  
Darlington LEA
Y
  
Y
Y
  
  
Derby LEA
Y
Y
Y
Y
  
  
Derbyshire LEA
Y
Y
Y
Y
  
  
Devon LEA
Y
  
Y
Y
  
  
Doncaster LEA
Y
  
Y
  
  
  
Dorset LEA
Y
  
Y
  
  
  
Dudley LEA
Y
  
Y
  
  
  
Durham County LEA
Y
  
Y
Y
  
  
Ealing LEA
Y
  
Y
Y
Y
  
East Riding of Yorkshire LEA
Y
  
Y
Y
  
  
East Sussex LEA
Y
  
Y
  
  
  
Enfield LEA
Y
  
Y
  
  
  
Essex LEA
Y
  
Y
Y
  
  
Gateshead LEA
Y
Y
Y
Y
  
  
Gloucestershire LEA
Y
  
Y
  
  
  
Greenwich LEA
Y
Y
Y
Y
  
Y
Hackney LEA
Y
Y
Y
  
  
  
Halton LEA
Y
  
Y
Y
  
  
Hammersmith and Fulham LEA
Y
Y
Y
Y
  
  
Hampshire LEA
Y
Y
Y
Y
  
  
Haringey LEA
Y
Y
Y
Y
  
  
Harrow LEA
  
  
  
  
  
  
Hartlepool LEA
Y
  
Y
Y
  
  
Havering LEA
Y
  
Y
  
  
  
Herefordshire LEA
Y
Y
Y
  
  
  
Hertfordshire LEA
  
Y
Y
Y
  
  
Hillingdon LEA
Y
Y
Y
Y
  
  
Hounslow LEA
Y
  
Y
  
  
  
Isle of Wight LEA
Y
  
Y
  
  
  
Isles of Scilly LEA
  
  
  
  
  
  
Islington LEA
Y
Y
Y
Y
  
  
Kensington and Chelsea LEA
Y
  
Y
Y
  
  
Kent County LEA
Y
  
Y
Y
  
  
Kingston upon Hull LEA
Y
  
Y
  
  
  
Kingston-upon-Thames LEA
  
Y
  
  
  
  
Kirklees LEA
Y
Y
Y
Y
Y
  
Knowsley LEA
Y
  
Y
  
  
  
Lambeth LEA
Y
  
Y
Y
  
  
Lancashire LEA
Y
  
Y
Y
Y
  
Leeds LEA
Y
Y
Y
  
  
  
Leicester City LEA
Y
  
Y
Y
  
  
Leicestershire LEA
  
  
Y
Y
  
  
Lewisham LEA
Y
Y
Y
Y
  
  
Lincolnshire LEA
Y
  
Y
Y
  
  
Liverpool LEA
Y
Y
Y
Y
  
  
Luton LEA
Y
  
Y
Y
  
  
Manchester LEA
Y
Y
Y
Y
  
  
Medway LEA
Y
  
Y
  
  
  
Merton LEA
Y
  
Y
  
  
  
Middlesbrough LEA
Y
  
Y
  
  
  
Milton Keynes LEA
Y
  
Y
Y
  
  
Newcastle upon Tyne LEA
Y
  
Y
Y
  
  
Newham LEA
Y
Y
Y
Y
  
  
Norfolk LEA
Y
  
Y
Y
  
  
North East Lincolnshire LEA
Y
Y
Y
Y
  
  
North Lincolnshire LEA
Y
  
Y
  
  
  
North Somerset LEA
Y
  
Y
  
  
  
North Tyneside LEA
Y
Y
Y
Y
  
  
North Yorkshire LEA
Y
  
Y
Y
  
  
Northamptonshire LEA
Y
Y
Y
Y
  
  
Northumberland LEA
Y
Y
Y
Y
  
  
Nottingham City LEA
Y
  
Y
Y
  
  
Nottinghamshire LEA
Y
  
Y
  
  
  
Oldham LEA
Y
  
Y
  
  
  
Oxfordshire LEA
Y
Y
Y
Y
  
  
Peterborough LEA
Y
  
Y
Y
  
  
Plymouth LEA
Y
  
Y
Y
  
  
Poole LEA
  
  
Y
  
  
  
Portsmouth City LEA
Y
Y
Y
Y
  
  
Reading LEA
Y
  
Y
Y
  
  
Redbridge LEA
Y
  
Y
  
  
  
Redcar and Cleveland LEA
Y
  
Y
  
  
  
Richmond upon Thames LEA
  
Y
  
Y
  
  
Rochdale LEA
Y
  
Y
Y
  
  
Rotherham LEA
Y
Y
Y
Y
  
  
Rutland LEA
  
  
  
  
  
  
Salford LEA
Y
  
Y
Y
  
  
Sandwell LEA
Y
  
Y
  
  
  
Sefton LEA
Y
  
Y
Y
  
  
Sheffield LEA
Y
Y
Y
Y
  
  
Shropshire LEA
Y
  
Y
  
  
  
Slough LEA
Y
  
Y
Y
  
  
Solihull LEA
  
  
Y
  
  
  
Somerset LEA
Y
Y
Y
  
  
  
South Gloucestershire LEA
  
  
  
  
  
  
South Tyneside LEA
Y
Y
Y
Y
  
  
Southampton LEA
Y
  
Y
Y
  
  
Southend LEA
Y
  
Y
  
  
  
Southwark LEA
Y
  
Y
Y
  
  
St Helens LEA
Y
Y
Y
  
  
  
Staffordshire LEA
Y
  
Y
Y
  
  
Stockport LEA
Y
Y
Y
Y
  
  
Stockton-on-Tees LEA
Y
  
Y
  
  
  
Stoke-on-Trent LEA
Y
  
Y
Y
  
  
Suffolk LEA
Y
  
Y
Y
  
  
Sunderland (City of) LEA
Y
  
Y
Y
  
  
Surrey LEA
  
Y
Y
Y
  
  
Sutton LEA
  
  
Y
Y
  
  
Swindon LEA
Y
  
Y
  
  
  
Tameside LEA
Y
  
Y
Y
  
  
Telford and Wrekin LEA
Y
  
Y
Y
  
  
Thurrock LEA
Y
  
Y
  
  
  
Torbay LEA
Y
  
Y
  
  
  
Tower Hamlets LEA
Y
  
Y
Y
  
  
Trafford LEA
Y
  
Y
  
  
  
Wakefield LEA
Y
  
Y
Y
  
  
Walsall LEA
Y
  
Y
Y
  
  
Waltham Forest LEA
Y
Y
Y
Y
  
  
Wandsworth LEA
Y
  
Y
Y
  
  
Warrington LEA
Y
  
Y
Y
  
  
Warwickshire LEA
Y
  
Y
Y
  
  
West Berkshire LEA
  
  
  
Y
  
  
West Sussex LEA
Y
  
Y
Y
  
  
Westminster LEA
Y
Y
Y
Y
  
  
Wigan LEA
Y
  
Y
Y
  
  
Wiltshire LEA
  
  
Y
  
  
  
Windsor and Maidenhead LEA
  
  
Y
Y
  
  
Wirral LEA
Y
Y
Y
Y
  
  
Wokingham District LEA
  
  
  
Y
  
  
Wolverhampton LEA
Y
  
Y
Y
  
  
Worcestershire LEA
Y
  
Y
Y
  
  
York LEA
Y
  
Y
Y
Y
  


BRIEFING NOTES

Sure Start

  Sure Start promotes the physical, intellectual, social and emotional development of young children so that they are ready to flourish when they start school. By 2004, Government will be investing £500 million each year in Sure Start and reaching a third of poor under fours.

  The Government's target is 500 programmes in disadvantaged areas by March 2004. Of these 437 programmes have been announced so far, and over 200 have been approved.

Early Excellence Centres (EECs)

  The Early Excellence Centre (EEC) programme is at the forefront of the Government's strategy to promote the benefits and raise the standard of integrated early years education and childcare.

  There are currently 49 EECs in the country. The aim is to double the number by 2004, so that even more local communities can benefit from having high quality centre-based integrated services.

  The Department has recently issued another invitation to join the programme, and is particularly keen to receive expressions of interest from Early Years and Childcare Partnerships that do not have an EEC in their area.

Neighbourhood Nurseries Initiative (NNI)

  In January 2001 Ministers announced the Neighbourhood Nurseries Initiative (NNI) which aims to create 45,000 new childcare places for the under fives in England's most disadvantaged communities.

  NNI is the biggest ever single investment to create new childcare places. In England £203 million of revenue funding from the DfES and up to £100 million of capital funding from the New Opportunities Fund has been made available over the next three years.

  Revenue funding has been allocated to Early Years Development and Childcare Partnerships (EYDCP) according to the number of wards in each Local Education Authority that fall within the most the disadvantaged 20 per cent of the DTLR Index of Multiple Deprivation 2000. Each EYDCP's allocation was weighted with the local population of 0-4 year olds. Partnerships without wards in the most disadvantaged 20 per cent were given the opportunity to bid for funding for pockets of disadvantage. Five EYDCPs took advantage of this opportunity.

  The 141 Partnerships that have received funding have now begun the practical work of creating the new childcare places and are developing their proposals with providers from the private, voluntary and maintained sector and other local stakeholders. Many of the proposals being developed involve a wide range of partners at the local level including community groups and voluntary organisations.

  Although some of the detailed proposals are at an early stage of development, the Partnerships have begun to identify prospective schemes and many have agreed a set of principles to inform their final selection.

The Nursery School Project

  The Nursery Schools Project (launched in October 2000) has provided additional funding via LEAs/EYDCPs with Nursery Schools to support projects designed to develop added-value services. By modernising and extending their services for parents and children, nursery schools will make a valuable contribution to the Government's integration agenda.

Wraparound Care Pilot Projects

  The DfES is funding pilot projects in five local education authority areas to develop innovative ways of providing wraparound care (ie early years education combined with childcare). The projects began in autumn 2000 and are running until the end of March 2003.

Teen Parent Pilot Project

  The aim of the Teen Parent Pilot Project is to help teenage parents into education, training and employment through providing high quality childcare and parenting support.



 
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