Annual Post Condition Improvement Fund Submission review and preview by Tim Warneford
Even in a such an ever-changing country as ours, the academy sector never ceases to throw additional challenges up. From the high churn of secretary of states to promises of new funding from existing streams or underspends.
This year we have witnessed spikes in energy costs that have doubled previous school budgets of 1.5% to an average 3.5%. With ongoing negotiations around teachers’ pay, that represents circa 85% of a school budget and thus where any increment threatens to have catastrophic impact on reserves.
The high levels of staff leaving the profession leave those remaining on low levels of morale. I have clients who had forecast a surplus of £400k now facing a deficit of £350k. It’s very tough out there. We are not talking about halting the recruitment of teacher assistants but redundancies for heads.
The education estate equates to over 50% of the government’s estate portfolio, yet it receives only 15% of their estate budget.
The National Audit Office calculated the backlog finding to be circa £6.7 billion in 2017 and by 2021 it was £11.4 billion and by this year, having accepted that the inflation needs adding, we are close to £15 billion.
When I assess the methodology underwriting Condition Data Collection Programme’s 1&2, I feel there is a strong case for arguing it’s closer to £20 billion of backlog funding needs. This is without adequately quantifying “hidden” threats such as RAAC, Stramit, Wood Wool roofing decks and remaining asbestos.
With the annual investment set at only £3.5 billion, via a combination of School Condition Allocation, Devolved Formula Capital and Condition Improvement Fund (CIF,) the rate of dilapidation out runs our ability to maintain our depreciating school’s-built environment’s assets.
When we factor in the wider economy’s inflation rate of over 10%, rises in building materials such as steel and copper of 25% and the dearth of skilled labour, through a limited pool of available labour, things look tough enough. However, when we further include the aforementioned reduction in school finances, we have a perfect storm when it comes to a school’s ability or willingness to invest in a financial contribution towards a CIF bid.
Their ability to access CIF loans, which are effectively Public Works Loan Board rates was also compromised as the rates rose from 1.17% in 2021 to 5.37 in 2022 which made the cost of borrowing significantly higher and thus less attractive.
Ahead of last year’s round of CIF submissions, many of my school clients, contributed the full 30% with the average coming in at around 15%-20%. This year, it has been considerably lower and given what we now know from the statistics provided via a Freedom of Information request, (Read Investigation: ‘Vulnerable’ schools miss out on essential repairs cash article, featuring me in the Times Education Supplement) the percentage rate for CIF awards, via the various levels of financial contribution, it will be interesting to see what the statistics will be for the awarded CIF projects, due to be published in “late May” 2023.
We undertook market testing and tendering ahead of our CIF submissions from September onwards and it was soon apparent, that project costs had risen dramatically, whether from Bradford, Birmingham, or London. Our data showed that some material and labour costs were particularly high in boiler and heating projects.
The rise in costs and reduction in school’s ability to contribute is likely to see less additional funds for the ESFA to use to cross-subsidise those schools with very high condition need but with no financial contribution.
Will this shortfall be compensated by a bigger CIF pot, will the number of higher value projects drop, or will there be a reduction in the overall number of awarded projects?
I hope that the DfE can secure an inflation adjusted CIF pot from the treasury and that the annual number of awarded projects will remain at the circa 1,400 level, regardless of the cost and that we can once again try and keep as many of our school’s estates a fit for purpose teaching and learning environment.