A level playing field? How to measure VFM and the equity of accrued points from contributions
In October last year, the ESFA announced changes to the scoring structure used to assess the 2019/20 Condition Improvement Fund (CIF) allocation. This included changes to scoring weightings for two of the three bid components; Value for Money (VFM): increased from 15% to 25% and Need: decreased from 70%-60%. The weighting for Planning was to remain the same at 15%. Within the Value for Money component, approximately a third of the marks awarded, are based on the trust’s contribution toward the project costs. The ESFA guidance further implied a greater onus on schools to maximise project contributions than in previous years.
CIF consultants interpreted the rationale behind the DfE’s decision to increase the weighing of the VFM component, as a mechanism for incentivising those trusts with financial resources to make meaningful contributions. It also serves to reduce speculative, ad hoc bids in favour of those that demonstrate how the project aligns with the overall estate strategy.
Implication of changes to weighting
Under the revised weighting structure, trusts who have made a significant contribution will be awarded points proportionate to the percentage of their contribution; up from 5 points to 8.
As a result, those contributing trusts gain an advantage in the competition for funds. It stands to reason that trusts in most need of funding (those in deficit or under financial notice) will consider themselves at risk of being further disadvantaged by this increase in points awarded for contributions.
The number of trusts in deficit and under financial notice, increases annually. These trusts, as per the very terms of their arrangement with the ESFA, are restricted from applying for CIF loans and as a result are unable to accrue the points available to those who can and do make a financial contribution.
Where a trust is unable to make a contribution, maximising scoring through the other components of the bid, in particular Need, becomes ever more critical. Under the new weighting system it is conceivable that a trust with less need but greater financial means could be favoured over a trust with greater need but limited financial means. The risk is that estates in poor condition will become poorer and ultimately, more expensive to rectify.
The ESFA’s Good Estate Management for School (GEMS), makes strong recommendations that trusts should adopt a preventive planned maintenance regime to reduce costly reactive repairs and minimise the impact of component failures on school operations. Thus the ESFA explicitly recognises the financial risks that delays cause to future expenditure.
Trusts that score highly on the Need component but fail to secure points via the financial contribution section, will find it hard to adopt this best practice approach. In this case further deterioration in the condition of the school’s built environment and increasing repairs will inevitably put additional pressure on finances, undermining the schools’ appeal to future pupils and staff alike. The spiral effect will have grave implications for the trust as a viable entity.
The annual evaluation process of approximately 6,000 CIF applications using the new weighted scoring, begins this week and the successful projects are due to be announced in April.
Analysis of the results will show whether trust contributions determine or disproportionately influence award success and allocation. This analysis will undoubted raise further questions about the way CIF is distributed, the mechanisms for determining its allocation and for defining, assessing and auditing value for money.
- Should CIF allocations be ‘means tested’ or would this unfairly penalise trusts with healthy finances?
- How do you feel about CIF project contributions? Is there an equitable formula for setting what is affordable?
- If you were a trust who couldn’t make a contribution this year, what advice did your consultant give you as to the percentage of project costs that you should offer?
- How should the ESFA evaluate value for money? Does the current system work? Should more effort be spent on measuring the outcomes achieved against those stated in the CIF bid (i.e. introduce post project evaluations on the performance of delivered work packages, fuel efficiency, reduction of repairs costs, occupancy of additional school places)?