For those of you reading our Building Futures Magazine at the Portsmouth conference, I would like to welcome you and thank Portsmouth City Council for hosting our November 2014 conference. I’m sure you will agree, 2014 has been a busy year, not only are we faced with the ongoing school places demand but also the significant challenge of reducing LA budgets and the impact that is having on staffing levels. On a positive note, I am delighted to say that amongst us we are delivering one of the largest schools capital investment programmes, providing exciting new learning spaces for children across the country.
Alongside the investment in new school places, significant funding is also being committed and spent on capital maintenance and specifically in 2014, to support the Universal Free Schools Meals (UFSM) Programme. I know from the extensive feedback I have received from the regional meetings, that there are concerns about the use of the Property Data Survey (PDS) for future capital maintenance allocations. I would like to assure you that the representations you have made have been reported back in full to our colleagues at the DfE and EFA. The late availability of the surveys over the summer holiday has proved to be a challenge making the checking of information with schools difficult. PDS has delivered a high level comparative data set for the school built estate and this has helped make a case for additional funding for schools in negotiations with the Chancellor. However, if this data is to be used further to make future capital allocations, it is imperative that it is accurate and that responsible bodies and schools have confidence with it. Mike Green, Director of Capital at the EFA is keen to talk about PDS at the conference and I look forward to the debate.
Over the past few months, I have spoken with many authorities about how hard everyone is working to deliver the vast array of capital building projects. The EFA is supporting this through the EFA frameworks alongside LA frameworks. It remains the fact that the largest amount of capital spent across the country still comes through local authorities and Diocesan Boards for delivery by folk such as yourselves. The UFSM offer proved our ability to react and respond at short notice with the majority of infant aged children now receiving a free school meal.
The impact of the removal of funding from LA budgets through CERA and ongoing budget cuts continues to have a real impact on staffing levels with many staff facing uncertain futures. My discussions with the EFA have always focused on the need for LAs to remain a delivery vehicle for capital but to do this, project management financial support will be required as with the Targeted Basic Need Programme.
The next challenge for us is likely to be inflation with tender price inflation rising over the last 12 months as output has increased across all sectors of the construction industry. Interestingly, construction output fell sharply in August, with the industry contracting year-on-year for the first time in 16 months raising some fears that the recovery across the industry could be set to stall or more likely explained as the volatility and fragility of the return to growth. However, the industry’s limited capacity to meet increases in demand for new work is likely to lead to inflationary pressure as national infrastructure and building projects increase in volume. This is particularly so in the South East. The RICS Building Cost Information Service has reported that tender prices will have risen by five per cent by the end of 2014 over the year. The RICS predicts that tender prices will continue to rise by between five and six per cent, per annum over the next three years as output continues to grow and the industry continues to adjust to meet the demand. The level of tender prices is predicted to return to the pre-recession peak in 2014, and tender prices are forecast to rise by around 30% by 2019. This is clearly a speculative view but there will be the challenge of limited resources and skills available now and in the future.
Due to the General Election in May 2015, the Executive has taken the decision to hold one conference in 2015. An important part of any EBDOG conference are the DfE and EFA policy and strategy updates and holding a conference just before or after an election would make this difficult. I hope that having just the one conference next year will help you in making the case to attend. The venue for November 2015 has yet to be agreed but will be shared widely once confirmed.
Finally, I would like to thank colleagues at the DfE, EFA and the EBDOG Executive for all of the support you have given me this year and I look forward to our ongoing workings.
Peter Colenutt
EBDOG National Chairman