Building schools for the future - Unison

Building schools 

for the future 

A BRANCH HANDBOOK

2 

BUILDING SCHOOLS FOR THE FUTURE 

Written and Researched for UNISON by: 

The Association for Public Service Excellence (APSE) 

2nd Floor, Washbrook House, Lancastrian Office Centre, 

32 Talbot Road, Old Trafford, 

Manchester M32 OFP 

Tel: 0161 772 1810 Fax: 0161 772 1811 

Email: enquiries@apse.org.uk

UNISON BRANCH HANDBOOK – 


Contents 

Section 1 - What is Building Schools for the Future? 5 

What is Building Schools for the Future? 5 

What’s wrong with BSF? 6 

Private companies involved in BSF 7 

Section 2 - How BSF works 10 

1. Educational vision 10 

2. Strategic Business Case 11 

3. Procuring a private sector provider 11 

4. Local Education Partnerships (LEPS) 14 

5. Alternatives to the LEP 16 

6. The use of PFI and conventional funding in BSF schemes 17 

7. Differences between new build and refurbishment schemes 18 

8. Treasury ‘Value for Money Guidance’ and inflexibility of PFI contracts 19 

Section 3 - How to influence BSF 20 

1. TUPE transfers 20 

2. The code of practice on workforce matters 21 

3. Staff communication 23 

4. School governors, councillors and parents 23 

5. Other trade unions 23 

Section 4 - Keeping services in house 25 

1. Background 25 

2. Keeping services in-house 25 

3. Carve out 26 

4. Sub contracting 26 

5. Legal issues for sub contractors 27 

6. Secondment 27 

8. In house services, Academies and BSF 28 3

4 


Section 5 - Case studies 29 

Bradford City Metropolitan District Council 29 

Knowsley Metropolitan Borough Council 30 

Manchester City Council 30 

Newcastle City Council 31 

London Borough of Greenwich 32 

Section 6 - Further reading, help and resources 33

A BRANCH HANDBOOK 

Section 1 – introduction 

1. What is Building Schools for the Future (BSF)? 

BSF brings together significant investment in secondary school buildings and Information Technology 

with significant educational reform. BSF is worth £2.2 billion of investment in its first year and it is 

intended to ensure secondary pupils in every part of England learn in 21st-century facilities. It is 

estimated that the programme will take 10-15 years to complete from 2005/06. 

The following local authorities are part of BSF: 

Wave 1 Pathfinder authorities 

n Bradford 

n Bristol 

n Sheffield 

n London boroughs of Greenwich, Lewisham and Southwark 

Remaining Wave 1 authorities 

n Knowsley 

n Lancashire 

n Leeds 

n Leicester 

n Manchester (phase 1) 

n Newcastle 

n London Borough of Newham 

n Solihull 

n South Tyneside/Gateshead 

n Stoke on Trent 

n Sunderland 

n London Borough of Waltham Forest 

These projects are now at various stages in the procurement process and some authorities are at quite 

an advanced stage. 

5

6 


The Department for Education and Skills (DfES) has announced a second wave of authorities which 

became fully engaged with the consultation and procurement process from November 2004, together 

with a third wave which came on stream from September 2005. 

Action point 1 

Wave 2 Wave 3 

Birmingham Kent 

Hackney Luton 

Haringey North Lincolnshire 

Islington Sandwell 

Kingston Upon Hull Southwark 

Lambeth Barnsley 

Liverpool Derbyshire 

Middlesbrough Durham 

Nottingham Tameside 

Tower Hamlets Salford 

Branches should open up dialogue on BSF with local authorities, if they have not done so 

already. They should know if their schools are or will be in BSF waves and should establish 

the consultation, participation and negotiating ground rules. 

2. What’s wrong with BSF? 

UNISON has welcomed the large investment in schools under BSF, but does not support the means of 

delivering the programme, especially the use of PFI. 

The main problems with BSF are: 

Lack of transparency and accountability 

The whole programme is managed at a national level through an arms length body – Partnerships for 

Schools (PfS) – which is unaccountable and has a significant private sector bias. PfS wants each Local 

Education Authority (LEA) to set up a Local Education Partnership (LEP). An LEP is a joint venture 

company in which the private sector has 80% control. This effectively removes local control and 

discretion from LEAs and makes the procurement process even less transparent than normal PFI 

projects. 

Conflicts of interest 

The LEA has a conflict of interest because it is both the client for the services provided by the LEP as 

well as a partner in the LEP and stands to lose money if the LEP fails. Many of the private companies 

bidding to become strategic partners in the LEP have conflicts of interest because they are also 

national advisers to the BSF programme appointed by PfS (see below). Private companies could be both


bidding for work and acting as advisers to LEAs at the same time. 

Exclusivity and inflexibility 

The nature of the programme means that an exclusive arrangement is set up with a private sector 

partner for the procurement of BSF projects. Many of the projects are so large that only a few 

companies are capable of bidding for the work. This creates monopoly suppliers who have little or no 

track record in delivering high quality education services. It is also unclear how these arrangements will 

accommodate new government or local authority policy initiatives such as the drive to improve school 

meals and promote healthy lifestyles or the use of school buildings for community purposes. 

Further privatisation 

Although it is clear that there are no operational, legal or ‘value for money’ reasons why local authority 

in-house services cannot continue to provide a range of services to schools under BSF, there is a 

danger that the BSF programme will lead to further outsourcing of direct and support services to 

schools. At the very least it could mark a return to a form of compulsory competitive tendering (CCT) for 

services which has been thoroughly discredited since its demise. 

Costs 

There is plenty of evidence that PFI is a much more expensive method of procuring capital assets such 

as schools than more conventional borrowing. The costs of the procurement process itself, with the 

engagement of external legal, financial and technical advisers, is hugely expensive and there is a 

danger that the costs of BSF will impact on the affordability of schemes in the long-term. 


A branch strategy should be developed, including which activists or members with specialist 

knowledge should be involved. The development of expertise will be important. 

3. The private companies involved in BSF 

There are a number of major private companies and financial/investment firms involved in delivering 

the BSF programme. Because of the nature of BSF the big companies bidding to be strategic partners 

with the local authority and to deliver projects under the programme are organised into consortia. 

These include an investment bank or venture capital organisation, a programme management 

specialist, a construction company, an ICT provider, a facilities management company and an 

educational services company, together with legal, financial and business advisers. The table shows 

some of the main consortia involved in bidding for the pathfinder/first wave projects. 

7

8 


Table 1 – Private consortia involved in BSF 

Consortia Main players 

Aura Learning Communities Sir Robert McAlpine, Robertson Capital Projects and 

Parsons Brinckerhoff 

Education 21 Mowlem 

Inspired Spaces Carillion 

MPB Education Mouchel Parkman and Babcock International Group 

Other members 

Synetrix; Kier Construction; Babcock; MITIE Cleaning 

Excell Learn Equion 

IntergratED Bradford Consortia led by Amey 

E4L (Environments for Learning) A consortium of Interserve, Barclays Private Equity and 

Mott MacDonald, which includes Cambridge Education 

Associates 

Paradigm Taylor Woodrow 

Transform Schools Balfour Beatty and Innesfree 

Axiom Education consortium including ABM Amro and Bryanston Square 

Meridian Education Partnership joint venture between EC Harris LLP, NIB Capital Bank 

NV and Alfred McAlpine Project Investments Ltd. The 

consortium’s supply chain includes Nord Anglia 

Education and Tribal Education, providing ICT and 

educational consultancy, respectively. 

21st Century Education consortium including Mott McDonald and Mill Group 

VINCI Plc VINCI PLC is an investor in public and private sector 

PFI, concessions and project development. The 

business consists of a number of operating companies 

that provide experience and expertise in many diverse 

but complementary areas of operation. 

Bouygues Consortium leaders 

HSBC Infrastructure Fund Management Ltd and 

Bouygues U.K. Ltd/ Ecovert F.M. Ltd 

Other members 

Aedas (Design); Cambridge Education Ltd; Linklaters; 

Cyril Sweett Consulting; Royal Bank of Canada 

Learning 21 Consortium leaders: Learning 21 – a joint-venture 

between VT Group and Costain Other members: ACP; 

VT Group; Costain Ltd; Verry Construction; School 

Works; Pinsent Masons; Ernst & Young; WS Atkins 

Planning 

Kajima Consortium leaders: Kajima Partnerships Ltd 

Other members: Turner & Townsend; Sheppard 

Robson; Key Educational Associates (KEA); Redstone 

Communications Ltd; Willmott Dixon Limited; MITIE 

PFI; Bevan Brittan; David Wylde Project Finance


Miller Construction (UK) Ltd Miller Construction, (UK) Ltd is part of The Miller Group 

which is the UK’s largest privately owned, house 

building, property development and construction 

business. 

In addition many of the companies involved in delivering the BSF programme have also been selected 

by PfS to act as national advisers to the BSF programme under a framework agreement. Under that 

agreement they will also advise local authorities as the client/procurer of the programme. The 

companies selected to be on the National Advisers Framework are as follows: 

Table 2 – National Advisors to PfS 

Partnerships for Schools – National 

Advisers 

Technical Project & Programme Management 

Atkins Consultants, Currie and Brown, Atkins, Buro 4, Hewitt Freeborn Associates, 

Faber Maunsell, Gardiner & Theobald, Hornagold & Hills, Lend Lease Projects, 

Gleeds, Mott MacDonald, Precept Mouchel Parkman, Osprey Mott 

MacDonald, PKF, Precept Programme 

Management, Turner & Townsend Group 

Team & Partnership Development Financial 

3Es Enterprises, Capita Group, BDO Stoy Howard, Ernst and Young, Grant 

Mouchel Parkman, Place Group, Thornton, KPMG, PWC, RBC, Tribal Group 

Tribal Group, WSP Group 

Communications Legal 

Beyond Design Solutions Ltd, Geronimo Addleshaw Goddard, Beachcroft 

Public Relations, Kinross and Render Wansbroughs, Bevan Brittan, Dickinson 

Ltd, MBD, Republic Communications Dees, Eversheds, Hammonds, Kilpatrick 

Stockton, Nabarro Nathanson, 

Norton Rose, Pinsents, Trowers 

and Hamlins, Ward Hadaway 

Education 

Capita, CfBT, Cocentra, Mouchel 

Parkman, Place Group 


Branches should check out the consultants and companies involved in BSF projects. UNISON’s 

Private Companies Unit should be able to provide information and assistance. 

9

10 


Section 2 – 

How BSF works 

1. Educational vision 

While BSF is primarily about new construction and capital investment in the secondary school estate, it 

is intended to act as a catalyst for effecting change in educational outcomes across England. 

BSF starts with the local authority setting out its vision for education in its area, including aspirations 

for improved educational outcomes. The BSF programme is intended to be flexible enough to be 

developed and refined in the context of the educational vision for a particular area. 

Local authorities have developed Learning Centres as part of their response to BSF. In Knowsley sites 

are planned to include educational psychologist services, alongside NHS Primary Care Trust services 

sited with the newly built schools. 

Specific issues which could be considered under the education vision for an area could include: 

n underperformance and underachievement 

n curriculum innovation 

n social Inclusion 

n children’s services, extended and full service schools 

n pupil behaviour 

n 14 – 19 education 

n school organisation 

n specialist schools 

n academies (see section 10 below) 

n information and Communications Technology (ICT) 

n workforce reform and remodelling 


Branches should take the opportunity to put staff at the heart of the education vision. BSF 

should tie in with other initiatives such as school remodelling and staffing reviews, school 

meals transformation and extended schools. Ensuring that staff are trained and rewarded for 

new responsibilities should be part of the process. 


Staff other than those in schools may be affected by the BSF programme and should be 

consulted and involved where necessary. Talks with BSF partners, like architects, offer the 

opportunity to involve our members in design of buildings and services.


2. Strategic Business Case 

The LEA has to develop a “Strategic Business Case” (SBC), based on the educational vision for its area. 

The SBC sets out the phases of the proposed building programme, arrangements for service delivery, 

ICT, teaching services and school management and brings together all the main elements into a 

coherent programme. 

The SBC requires input from a range of stakeholders. Guidance issued by Partnerships for Schools 

states that this includes trade unions, head teachers, school governors and the Learning and Skills 

Council. In order to take forward the SBC the LEA has to set up a Strategic Partnering Board (SPB) with 

representation from all the identified stakeholders. The role of the SPB at this stage is to refine the 

strategic case and to evaluate and revise the proposals. 

This is a key point in the process when UNISON can become effectively involved and influence the 

programme for BSF. 

One of the roles of the SPB is to determine the likely investment programme for schools. Investment 

under BSF is normally undertaken in a number of phases, unless the capital expenditure and the 

number of schools to be built/renewed is of sufficiently small scale that it can be undertaken in one 

phase. 

The SPB engages the services of legal, technical and financial consultants often through the National 

Panel of Advisers (see Table 1 – Private companies involved in advising on BSF) to assist in preparing 

a business case for the investment. This is known as the Outline Business Case (OBC). The SPB is set 

up by the LEA to develop the local approach to BSF and it involves a range of stakeholders. If and when 

a LEP is established or an alternative approach is adopted, the SPB effectively becomes the ‘client’ 

body for managing the partnership and the relationship is constituted formally. 


Branches should have secured input into the development of the BSF strategy, leading to the 

SBC. They should then be consulted as stakeholders in line with PsF guidance. Remember: 

wherever there is a body established to plan and execute part of the BSF programme, UNISON 

should seek a place on it representing the workforce. 

3. Procuring a Private Sector Provider 

The OBC is submitted for central government approval in order to gain funding support for BSF and to 

confirm the affordability of the investment programme. Once approval has been secured the LEA can 

then commence a procurement process to choose a private sector provider. The private sector provider 

is chosen through a procurement process to be the council’s partner either through a Local Education 

Partnership (LEP) or alternative structure to manage and deliver the BSF programme (see 4 – Local 

Education Partnership and 5 – Alternatives to the LEP below). 

The procurement route for a private sector provider is undertaken under the EU Competitive Negotiated 

Procedure. This procedure has been used in the UK to procure PFI projects and other strategic service 

partnerships. The next box describes the typical elements of the procedure: 

11

12 


Stage 1: 

Strategic Business Case 

(SBC) - Establish a 

business need. Is there a 

pressing need for change 

in the service? Will it 

involve investment? 

Stage 2: 

Appraise the options -A 

strategic examination of 

the options and the ways 

of achieving change. 

Stage 3: 

Outline Business Case - 

Prepare an outline 

business case for the 6SF 

partnership and 

demonstrate that the 

preferred option is 

affordable against 

alternatives. 

Stage 4: 

Develop a Team- Set up a 

Project Team with the 

appropriate skills and 

experience including 

external legal, financial 

and business advisers. 

Stage 5: 

Decide Tactics - 

Determine the tactics for 

the procurement process 

itself 

Stage 10: 

Invitation to Negotiate - 

The ITN is the formal 

request for bids from 

prospective bidders. At 

this stage the Council 

should finalise the criteria 

for evaluating proposals. 

Stage 9: 

Refine the Appraisal - 

Before issuing an 

Invitation to Negotiate 

(ITN) refine the business 

case. 

Stage 8: 

Shortlisting - Compile a 

shortlist of prospective 

bidders from the list of 

potential suppliers. 

Stage 7: 

Preliminary Invitation to 

Negotiate (PITN) - Assess 

the competence of the 

interested suppliers by 

reference to their 

technical capacity, 

financial and economic 

standing. 

Stage 6: 

Expressions of Interest - 

Publish a Prior Information 

Notice (PIN) in the Official 

Journal of the European 

Union (OJEU) and call for 

expressions of interest. 

Stage 11: 

Receipt and Evaluation of 

bids - Formal evaluation 

of the bids in accordance 

with the criteria set out in 

the ITN. At the end of this 

stage there may be a 

clear preferred bidder or it 

may be necessary to seek 

a best and final offer 

(BAFO) on the basis of the 

clarified bids. 

Stage 12: 

Selection of preferred 

bidder and final evaluation 

-The final bid is selected 

against key value for 

money and affordability 

criteria. 

Stage 13: 

Contract award and 

financial close - The 

contract is signed and an 

award notice placed in the 

OJE U. 

Stage 14: 

Contract management - 

Implementation of new 

processes, systems and 

management 

responsibilities for 

effective contract 

management, monitoring 

and review.


Private Sector Providers are usually consortia of private sector organisations which typically include a 

programme management specialist, a major construction firm, a major ICT provider, a facilities 

management company, and an educational services company (see table 1 page x). Table 3 shows the 

short listed bidders for Newcastle City Council:- 


Some branches may have negotiated a procurement policy agreement. This should include 

involving unions at the earliest stage, in the fullest way (option appraisal, selection of 

consultants, short-listing contractors, award of contract) with maximum access to 

information. The agreement should allow adequate time-off and cover for duties. Where such 

an agreement exists, it can be adapted for BSF. Where it does not, a protocol should be 

negotiated to secure full trade union involvement. 

Table 3: Example: Newcastle City Council short listed bidders 

Consortia name Members of consortia Involvement in the project 

Aura Learning Sir Robert McAlpine Ltd. Equity stake 

Communities Research Machines Partnering 

Consortia Robertson FM Services/LEP 

Robertson capital Projects Design 

Parsons Brinckerhoff Ltd Construction 

Education and partnering Services 

ICT provider 

Transform Schools Balfour Beatty Group (parent Equity Stake 

of Balfour Beatty Partnering Services/LEP 

Construction Ltd., Balfour Design/Architect 

Beatty Capital Projects Ltd. Construction 

And Haden Management Ltd. Facilities Management 

Tribal Group Plc Education Advisers 

Vigilen Ltd ICT provider 

Environments for Mott MacDonald Ltd. Equity stake 

Learning (E4L) Interserve Plc. Partnering 

Barclays Private Equity Services/LEP 

Microsoft LEP Partner 

Design/Architect 

ICT provider 

Construction 

Facilities Management 

Commercial confidentiality and freedom of information 

It is worth noting that where UNISON branches seek disclosure from local authorities about the bidders 

and ask for information on the nature of bids and proposals, they may be asked to sign a commercial 

confidentiality agreement, prior to any disclosure of information. This is standard practice where the 

financial and commercial details of bidders’ proposals are shared with trade unions during the 

procurement stage. However, branches should be aware that confidentiality agreements limit what a 

13

14 


trade union can then do with the information provided, particularly where this impacts upon the 

membership. If the branch is asked to sign such an agreement it is important that appropriate legal 

advice is sought through the regional office. 

Branches should also remind local authorities about their obligations under the Freedom of Information 

Act 2000. It is not necessarily the case that all information relating to bidders should be treated as 

confidential. There are strong public interest reasons for disclosing information about those seeking to 

run public services such as schools. Local authorities need to robustly defend any decisions not to 

disclose information. The Information Commissioners Office (ICO) deals with complaints where there 

has been a failure to disclose information. While branches need to ensure that they are not making a 

vexatious complaint under the Act any legitimate complaints will be considered. The website address of 

the ICO is www.informationcommissioner.gov.uk (see UNISON guide in resources) 


Some authorities may be reluctant to include unions on BSF boards and may try to withhold 

information and limit participation. Branches should be aware of their rights to consultation 

and to information under the Freedom of Information Act 2000 (see UNISON Bargaining 

Support guide). 

4. Local Education Partnerships (LEP) 

A Local Education Partnership (LEP) is a Joint Venture Company set up between a private sector 

provider, the LEA and Partnerships for Schools to deliver BSF projects. The private sector provider has a 

controlling stake in the LEP with 80% of the shareholding, while the LEA and Partnerships for Schools 

have 10% each. The private sector provider therefore has overall control of the LEP (See following 

diagram). 

An LEP is not compulsory, but the Department for Education and Skills (DfES) expects local authorities 

to use the LEP model unless they can demonstrate a better value for money and more effective method 

of delivering the investment made possible by BSF. 

An LEP is usually set up for a 10 year period or the lifetime of the BSF programme, but it could be 

extended beyond the 10 years by agreement. An LEP effectively manages the whole of the procurement 

process on behalf of the LEA. It determines investment decisions, manages the programme and 

organises service delivery. 

The private sector provider as well as having a controlling stake in an LEP can be either “integrator” 

private sector provider or “integrated” private sector provider. That is to say: 

n an “integrator” PSP is one that does not have its own preferred supply chain (a range of 

contractors/partners who deliver aspects of the programme such as a construction company or an 

IT provider – see table 1 above) and seeks to secure value for money (VFM) by market testing the 

supply chain for each individual BSF project. 

n an “integrated” PSP brings a preferred supply chain with them who then work over a number of 

phases of the BSF using a long-term supply relationship and, because of the high volume of work in 

the pipeline, is claimed to drive VFM for the programme (See Section 3, table 1 above). 

Most of the PSPs involved in the BSF programme are “integrated” PSPs (see Section 1 – The Private 

Companies involved in BSF). 

When the LEP is set up it will manage procurement arrangements for BSF which will be a mix of PFI 

and conventional funding. For the first full year of BSF (2005/06) it is expected that total funding will be 

£2.2bn of which £1.2bn is expected to be for PFI projects and £1bn for conventionally funded projects.


Future funding will depend on Treasury Spending Review settlements. 

Capital expenditure in PFI projects will be funded by LEP borrowing which will be repaid through 

annual unitary charges from the LEA. LEAs are expected to receive financial support from DfES, as they 

do now through PFI credits, to meet the unitary charge obligations for PFI schemes. Capital expenditure 

for conventionally financed projects will be funded through a mix of capital grant or revenue support 

from DfES and local authority budgets. Where these contracts involve on-going maintenance charges, 

they will need to be paid from local capital or revenue budgets. 

The next diagram shows how the LEP model is designed to work in practice. The supply chain is the 

range of projects delivered through BSF which could be either individual PFI projects or conventionally 

funded projects. 

The Strategic Partnering Agreement between the LEA and the LEP sets out the scope and range of 

services expected from the PSP. This can reflect local circumstances and requirements but advice from 

PfS suggests that this can include: 

n estate planning – managing and delivering the overall BSF programme on behalf of the LEA, 

including identifying investment needs and phasing the overall programme, together with the 

volume of capital investment and the scope of services covered 

n joining up funding streams – ensuring that all funding streams are pooled and that third party 

income can be maximized, including property development potential 

n integrated ICT provision - ensuring the design, planning and delivery of integrated ICT provision in 

BSF schools 

n integration of support services – ensuring that the construction and ICT programme is effectively 

integrated with education support and school improvement services 

n business continuity – making sure that the BSF programme minimizes disruption to ongoing 

education of pupils during the construction/refurbishment phases 

n project development and management of the supply chain – Identifying the best solutions to deliver 

the SBC in consultation with the stakeholders involved on the SPB and proposing solutions including 

putting together and managing the supply chain for projects. 

Table 4 – Local Education Partnership Structure 

Strategic Partnering 

Agreement 

BSF Strategic 

Business Case 

Local Authority(s) Strategic Partnering Board 

(incl. schools, LSC, Diocese, 

PCT etc) 

Local Education 

Partnership 

Supply Chain 

Partnerships for 

Schools 

Local Authority(s) 

Private Sector 

Partner 

15

16 


5. Alternatives to the LEP 

Although it has been actively discouraged by PfS there are alternative approaches to the procurement 

of a private sector partner that does not involve the formation of an LEP. Some examples of these are 

shown below: 

(a) Manchester City Council - the Local Authority Partnership (LAP) approach 

Manchester City Council has a leading reputation for its procurement procedures. It has set up a BSF 

project team bringing together various disciplines such as property services, partnerships, accountancy 

and procurement as well as education specialists. 

Manchester decided that the LEP was not an appropriate model for them. Instead they established a 

Local Authority Partnership (LAP). This model still provides for involvement of other stakeholders in the 

City such as the Learning and Skills Council but it does not give formal shareholdings to private sector 

partners in the way that an LEP does. 

The Manchester Local Authority Partnership ensures that the new buildings meet the needs of 

Manchester children in improving educational attainment but the Local Authority Partnership Board will 

not be procuring the new schools or organising the refurbishment of existing schools. 

The absence of an LEP means that, in Manchester, procurement is done through the city council in 

consultation with stakeholders such as school governors, Learning and Skills Council and, where the 

new school will be a faith based school, Diocesan Representatives. This gives the council greater 

control over the timetable for the building programme. Contractors have already been appointed to 

assist in the design and building of the new schools. 

Because Manchester is not using PFI for its BSF programme, services such as catering and cleaning 

are unaffected and schools will still have the option of using use the council’s in-house teams. The 

freedom for schools to use the provider of their choice for such services came about as a result of ‘fair 

funding’ which provides schools with their own devolved budgets to spend as they so choose. The 

council procurement group has consulted the in-house catering teams on the design of new kitchens to 

ensure they meet the requirements for a quality catering provision within schools. This is unlikely to 

happen under PFI. 

The council has also consulted residents and other stakeholders on the development of a district 

governance model for education and children’s services. It is anticipated that such an approach will 

provide a more coherent framework for all services, including education, social services and health 

initiatives, delivered to children in the city and that such an approach would be best developed 

alongside the BSF programme. 

(b) London Borough of Greenwich 

The London Borough of Greenwich is also developing a different procurement model to the LEP and has 

secured approval from DfES to pursue an alternative approach to selecting a strategic partner. 

The Greenwich model is a variation on the LEP in that it does not involve the formation of a Joint 

Venture Company. Instead the procurement process involves two stages. Firstly a Strategic Partnering 

Organisation (SPO) is procured and appointed using the negotiated procedure under EU procurement 

rules. The supply chain for BSF is then subject to further competitions. The SPO is prohibited from 

performing project services such as construction and long term service contracts. Greenwich believes 

that better value for money is achieved through separate competition for the supply chain. 

The SPO is responsible for partnering services e.g. identifying, scoping and developing projects on 

behalf of the council and some project services e.g. site logistics, site supervision, procurement, design 

management and integration. It would procure construction and long-term service contracts separately 

through open competition.


While this approach which can be described as an integrator PSP (See Section 4 above) avoids some of 

the problems associated with the LEP, there are still many issues which need to be resolved including 

accountability and the involvement of in-house services. It does however, illustrate that the LEP model 

is not the only viable approach to delivering BSF. 

In summary, the LEP model creates serious problems. 

n An LEP is a costly and complex arrangement which bypasses the LEA. Affordability is a major issue. 

In September 2004 it became apparent that fewer new schools would be built in the first wave of 

BSF than expected. A number of local authorities have reported that they have been struggling to 

find their share of the funding. On 29 September 2004 a PfS spokesperson said: “There is an 

affordability gap and this is a serious problem that needs to be addressed. The DfES is looking 

carefully at the problem and needs to spend time getting it right because it will have a knock on 

effect on the whole programme” (Contracts Journal 29 September 2004) 

n An LEP is more accountable to its major shareholders (PfS and the PSP) than to the key 

stakeholders represented on the Strategic Partnering Board. There is a significant danger that the local 

authority influence and control will be seriously diluted with priorities being driven by the needs of the 

private sector partner and a government quango rather than the needs of the council and its 

stakeholders. 

n Local authorities may already have partnering arrangements for a range of activities including 

design and construction which they may not be able to accommodate within the LEP model. 

n It is more difficult for in-house services to continue to provide a range of services to schools 

through the LEP because of the complex structure of the Joint Venture Company and because the 

LEP effectively manages the procurement of all future BSF schemes. The fact that the LEP manages 

the supply may prevent in-house teams from either bidding for, or providing, school based services. 

There is a danger that the LEP model will be forced on local authorities as a precondition of receiving 

capital funding for renewing the secondary school estate. However, a number of local authorities in the 

pathfinder and Wave 1 programmes have developed different approaches which meet the same 

objectives and do not require the use of an LEP. These are described below. 


Branches should be pushing the case for a project structure which keeps the local authority 

in control of any partnership using examples of where this has been achieved. 

6. The use of PFI and conventional funding in BSF schemes 

The use of the Private Finance Initiative (PFI) has been a feature in all advice from DfES and 

Partnerships for Schools (PfS). £1.2 billion of PFI credits has been made available to support the BSF 

projects (over 50% of the funding stream). 

PFI operates within BSF. The usual arrangement is for a consortium to be established to design, build, 

finance and operate a new building (DBFO). Some facilities management services such as building 

cleaning, building maintenance, reception and security services and even catering may be provided by 

the PFI consortium (or by sub-contractors). See Section 4 – In-house service delivery and the Building 

Schools for the Future Initiative. 

(i) Funding PFI 

In PFI schemes the private consortia borrow the money to build a new school. Once the building 

becomes operational the local authority pays to use it. The charges incurred by the private sector are 

17

18 


much higher than the cheaper route of using conventional procurement (See Section 1 (2) What’s 

wrong with BSF). In the case of BSF, the local authority must ensure it can meet its payment 

obligations under the PFI deal. This means that financial resources used to pay for PFI can be tied up 

for many years reducing any flexibility in the local authority budget. 

PFI is particularly inflexible in schools. PFI payments have to be met regardless of pupil numbers but 

changes to pupil numbers affect school budgets while the local authority remains responsible for 

ensuring the payments. They bear the demand risk despite having less control over the education 

system under the LEP model. 

One of the advantages claimed for PFI is that ‘risk’ is transferred to the private sector - risks such as 

contracts taking longer than expected to complete or material and construction costs going up. The 

argument is that if the private sector is involved then these risks, which can increase prices of projects, 

are transferred away from the public sector purse. However, there is a major flaw in this argument as 

these risks could be transferred to the private sector under conventional procurement anyway. (See 

also Section 4 – In-house service delivery and the Building Schools for the Future Initiative for a 

description of risk transfer and its impact on in-house service involvement in schemes). 

For more general criticisms of PFI see UNISON reports on PFI (resources) 

(ii) Supported Borrowing 

PFI is not the only kind of funding under BSF. Manchester City Council is using conventional funding for 

all its 15 BSF schools with Supported Borrowing. 

Supported Borrowing is a traditional form of funding for public sector capital works. The government in 

effect, provides the local authority with capital grant to support the cost of borrowing money through 

conventional means. (This is different to Prudential Borrowing where the local authority must first 

establish if it can afford to repay any debts it has created.) Supported Borrowing allows the government 

to provide credits – similar to PFI credits – for councils to use to build new schools as an alternative to 

PFI. 

Manchester anticipates that the use of the Supported Borrowing route will enable it to procure the new 

buildings much more quickly than PFI. A report to Manchester City councillors states: “By adopting a 

traditional procurement approach, the council will retain greater flexibility to introduce its initiatives, in 

particular around regeneration, community involvement and service delivery partnerships as they 

develop over time”. 


Branches can use UNISON’s anti-PFI materials to challenge its use. Arguments on value for 

money, inflexibility, complexity and long-term uncertainty should be used to minimize the PFI 

elements in the BSF. 

7. Differences between new build and refurbishment schemes 

APSE research shows that where schools are to be refurbished conventional funding will be used while 

PFI tends to be the preferred funding arrangement new build schemes. This demonstrates that 

refurbishment schemes are considered too risky by the private sector because of the unknown or 

unquantifiable risks. So branches may find that the type of funding used within a BSF programme is 

dictated by whether or not schools are to be built from new or are to be refurbished. Many authorities 

will use a mixture of funding as well as a mixture of new build and refurbishment schemes.


8. Treasury Value for Money Guidance and inflexibility of PFI 

contracts 

In July 2004 the Treasury issued Value for Money Guidance (VFM) to local authorities that stated that 

the option of excluding services from PFI ought to be considered on Value for Money grounds. The 

guidance urged public bodies to consider strategic issues such as the implication of loss of control over 

a service should it be included within PFI and loss of flexibility as part of the VFM assessment; and that 

it was not just a cost driven consideration. 

APSE Briefing 04/36 covers the guidance in more detail and this may be downloaded from the APSE 

web site on www.apse.org.uk 

School meals are a stark example of where VFM can be a useful campaigning tool for branches 

seeking to exclude support services from PFI. Government promises of increased funding for school 

meals will be difficult to deliver in PFI contracts unless the contracts w are opened up and can meet 

any new demands placed on the school meals service. 

19

20 


Section 3 – 

how to influence BSF 

1. TUPE Transfers 

BSF may involve the transfer of school based staff to a new provider under TUPE. Under the TUPE 

regulations, the council must inform and consult trade union representatives about the transfer 

(Regulation 10) at the earliest opportunity. 

Information and consultation under TUPE 

The authority must inform and consult either representatives of a recognised trade union or elected 

representatives of the employees. 

The employer of any employee, who may be affected, must tell the trade union: 

n that the transfer is going to take place, approximately when, and why 

n the legal, economic and social implications of the transfer for the affected employees 

n whether the employer envisages taking any action (reorganisation for example) in connection 

with the transfer which will affect the employees, and if so, what action is envisaged. 

Where the previous employer is required to give the information, he or she must: 

n disclose whether the prospective new employer envisages carrying out any action which will 

affect the employees, and if so, what 

n the new employer must give the previous employer the necessary information so that the 

previous employer is able to meet this requirement 

n the information must be provided long enough before the transfer to give adequate time for 

consultation 

n if action is envisaged which will affect the employees, the employer must consult the trade 

union representatives of the employees affected about that action 

n the consultation must be undertaken with a view to seeking agreement 

n during these consultations the employer must consider and respond to any representations 

made by the representatives 

n if the employer rejects these representations s/he must state the reasons. 

The employer must allow access to the affected workforce and to such accommodation and facilities, 

eg use of a telephone, as is appropriate. 


Where members do transfer to a new employer, full TUPE protection should be given. TUPE 

Plus agreements, with guarantees for the duration of the contract should be negotiated.


2. The Code of Practice on Workforce Matters 

The Code of Practice on Workforce Matters should apply to BSF contracts. Where it is deemed not to 

apply, branches should be aware that TUPE will almost certainly apply to the transferring workforce as 

a straight forward matter of employment rights. 

School staff are employees of the local authority, unless they work in foundation, academy or voluntary 

aided, schools. The Code of Practice on Workforce Matters applies where a local authority employs staff 

at the school who are transferred to a contractor and it also applies if that contract is subsequently retendered. 

Branches are reminded that the UNISON guide to the Best Value Code of Practice on Workforce Matters 

(see resources) suggests the following issues are agreed with the local authority and any incoming 

contractor and should form part of a model contract clause to enforce the code through the local 

authority and the incoming contractor: 

TUPE 

TUPE will apply to local authority staff transferred to the contractor 

TUPE will also apply to local authority staff transferred to the contractor, where there is any change of 

employer under the contractor 

n even if by law TUPE does not apply the authority and the contractor will conduct themselves as if 

TUPE applies 

n the contractor has to ensure that each sub-contractor or service provider will provide all of the 

transferred staff with the same terms and conditions which they had immediately before transfer 

n the contractor undertakes that the transferred local authority employees and any new employees 

will have applied to them any improvement to pay and conditions agreed by the NJC 

n the contractor must provide new employees with the same terms and conditions and pay as 

transferred employees 

n the contractor must ensure that each sub-contractor, or service provider, will provide new 

employees with same terms and conditions and pay as transferred employees 

n during the life of the contract, the contractor will not adversely change the terms and conditions of 

employment of the transferred staff. 

Pensions 

Pensions are a highly contentious issue for members and branches. UNISON’s preferred negotiating 

position for branches is that the contractor seeks admission to the Local Government Pension Scheme 

(LGPS). The following guidance points may be helpful and are reflected in the pensions arrangements in 

the workforce code: 

n the contractor ought to apply for admission to the LGPS and ensure that any sub-contractor or 

service provider does so too 

n the contractor must give new starters access to the LGPS 

n if a contractor sub-contractor, or service provider is not admitted or ceases to be admitted to the 

LGPS they must: 

n discuss this with the local authority and with UNISON representatives 

n offer transferred and new staff an employer’s final salary pension scheme which is GAD certified as 

broadly comparable to the LGPS 

21

22 


n continue to take steps to be admitted to the LGPS 

n allow transferred and new staff to choose whether to join the LGPS if the employer is admitted to 

the LGPS. 

New Employees 

The contractor must comply with the provisions of the code of practice 

The contractor must ensure that new employees are offered either: 

n membership of the LGPS or 

n membership of a good quality employer pension scheme consisting of either a final salary defined 

benefit scheme or 

n a defined contribution scheme where the employer matches employee contributions up to 6% or 

n a stakeholder pension scheme where the employer matches employee contributions up to 6%. 

Disclosure of information 

At the request of the authority the contractor must provide the authority with full and accurate 

information, including the terms and conditions of employment of transferred staff and new staff, to 

monitor compliance with the code of practice. 

Consultation 

The authority and the contractor must comply with its TUPE and code of practice obligations to consult 

trade union representatives. And the contractor shall ensure that each subcontractor or service provider 

will also comply with their TUPE obligations to consult trade union representatives. 

Trade union recognition 

The authority recognises the trade unions as representatives of the authority’s employees. 

The contractor recognises and shall ensure that each service provider shall recognise the trade unions 

for collective bargaining, consultation and representation. 

Returning employees 

TUPE will apply to employees transferred from the contractor to the local authority. 

Single status 

The contractor is required to provide a report to the authority showing the number of employees 

affected by the single status agreement; the steps taken to mitigate the effects of the annual increase 

in wage costs; and the net annual cost of implementation of single status. 

Enforcement of the code 

If following the procedure set out in the code, the contractor fails to comply with the code, the authority 

may invoke the breach of contract and/or terminate the contracts. 

The contractor must comply with the Alternative Dispute Resolution mechanism to resolve disputes on 

the code.


The code of practice needs to be effectively enforced to ensure that contractors and local authorities 

comply with both the spirit and intention of the code. One way in which this can be done is to ask the 

local authority to write in to any contracts with the private sector a contract compliance clause on the 

Code of Practice on Workforce Matters. UNISON has produced a model contract clause which branches 

should lobby employing authorities to include in their contracts. The model contract clause is available 

from UNISON’s bargaining information and support group. 

The code is given statutory effect by S.101 and S.102 of the Local Government Act 2003. Local 

authorities are responsible for its implementation. Where authorities fail to implement the code 

branches are able to invoke the Alternative Dispute Resolution Procedures which provides for initial 

complaints to be dealt with by the local authority allowing ultimately for a complaint to the council’s 

external auditors. Where the code has been breached UNISON can ask that the auditor draws attention 

to this and reports upon this in the authority’s Performance Plan Audit. 

If the code is seriously breeched it could theoretically be possible for the local authority to consider this 

a reason to terminate the contract. However the complexities of contract law would mean that the 

council would need to consider a range of issues before taking such punitive action, such as the effect 

of the breach of the code on the standards of service quality. However it may be possible for the 

council to ensure appropriate penalty clauses are included in the contract to discourage the contractor 

from breeching the code in the first place. 


Branches should ensure application of the Code of Practice on Workforce Matters to avoid a 

two-tier workforce, where staff transfer. It should be referred to in all contract documentation 

and in the OJEU advertisement. Where an academy is established, branches should seek 

adoption of the code, pointing out the disadvantages of having staff on different pay and 

conditions of service. 

3. Staff communication 

Many school support staff may be aware that a new school is to be built. They may not know how this 

will affect them. Newcastle UNISON engaged with other groups such as the teacher unions and the 

regional TUC to launch an awareness campaign about academies and the authority’s BSF programme. 

This included posters and leaflets being distributed within the community and to school staff. 

4. School governors, councillors and parents 

School governors may not be aware of the ways in which in-house service providers can be retained 

under PFI. Councillors may also be unaware that they do not have to include facilities management 

services such as catering and cleaning within the contracts. 

Parents are a powerful lobbying group and whilst they might welcome the investment in the school, 

they may have issues of trust with the private sector providing catering and cleaning services. 

5. Other trade unions 

Teacher unions can be powerful allies in ensuring that the best possible arrangements are entered into 

to safeguard staff. Reliable support services are an integral part of the national strategy to reduce 

23

24 


teacher workloads and they have also voiced concerns about the establishment of academies. The 

following is an extract of campaigning advice from the NUT to local councillors “Any diminution in 

services to schools will have a negative impact on the national strategy. Academies are not accountable 

to local communities. When a local council opts to set up an academy, it relinquishes responsibility to 

the school and for its resources. These become the property of a private sponsor. Handing over 

public property, premises and land that is owned by the local authority to academy sponsors is ‘selling 

off the family silver’!” 

Other NJC and craft unions may also have an interest in BSF particularly if they organise in areas along 

traditional lines. Other in-house services that could be affected by BSF are building maintenance, 

grounds maintenance, school transport services, and security and information technology. 


Branches should include a communications component in their BSF strategy. It should keep 

affected members briefed as well as the wider union, raise public awareness of the issues 

and draw on the support of other unions, councillors, governors, parents and the media.


Section 4 - 

Keeping services in 

house 

1. Background 

There are a wide range of non teaching services currently provided directly to schools that are affected 

by BSF. They include: 

n school meals 

n school cleaning 

n building maintenance 

n janitorial/caretaking 

n school grounds maintenance 

n school based administration 

n ICT 

The case studies show there are different procurement routes for BSF projects. Some schemes use 

the Private Finance Initiative (PFI) whereas others use more traditional routes. The key difference will 

be the impact that continuing in-house involvement has on risk transfer (See Section 2 (6) the use of 

PFI and conventional funding in BSF schemes for a description of risk transfer). 

The Treasury have recently issued guidance which says that services do not have to be included in PFI 

schemes. They encourage the public sector to examine the long term strategic risks of transferring 

services to the private sector in PFI. For example public bodies need to consider the loss of skills or the 

risk to the public or communities if contracts go wrong. A good example of this would be the loss of 

catering contracts which can no longer respond to new Government initiatives for delivering healthy 

school meals. (APSE briefing 04/36 examines the Treasury Value for Money guidance in further detail 

and can be downloaded at no cost from the APSE website www.apse.org.uk.) 

2.Keeping services in-house 

There are three routes to In-house involvement in BSF, whether or not PFI is used, they are carve out, 

sub-contracting or secondment. 

The difference between sub-contract and carve out arrangements is that when a sub-contract 

agreement is made the council’s in-house teams are guaranteed work from the PFI contract. Where a 

carve out arrangement is reached the in-house teams are placed in the same position as they were in 

before a PFI was entered into, they can bid for contracts from individual schools, that have their own 

budgets from which they buy in services such as catering and cleaning. 

25

26 


3. Carve out 

Carve out is where one or more elements of a service are removed from the contract and remain 

directly delivered. In PFI hospitals there has always been a carve out of clinical services. In education 

teaching jobs have been carved out and stayed with the local authority. Other services such as catering 

have also been excluded from some PFI contracts. Stoke-on-Trent’s schools PFI excluded catering, 

cleaning, caretaking and support staff. In Glasgow catering was initially part of a PPP scheme but on 

evaluation of the bids, including one from the in-house caterer, the in-house provider was found to be 

most competitive on price and quality and therefore catering was excluded from the contract. 

Knowsley council has decided to ‘carve out’ school meals from the school building programme 

believing that this is of strategic importance to the local authority and that it will have little impact on 

the viability and value for money of the BSF programme. Similarly Manchester is not including catering 

or cleaning in any of its BSF schemes as they too believe that there is little to be gained and a lot of 

flexibility to be lost by including services to schools within the new build programme. 

Local authorities can also seek Mandatory Variant Bids where the PFI contractors are asked to provide 

two bids. One in which they bid to carry out support services and one in which they bid with certain 

services excluded. The services that have been excluded from the variant bid can then be evaluated 

separately by the local authority to decide if they can achieve better services and better prices with the 

services included or excluded from the PFI. This provides in-house services the opportunity to bid for 

the work. 

4. Sub Contracting 

There are a number of examples of in-house service providers acting as sub-contractors to the PFI 

consortium (known as a Special Purpose Vehicle (SPV)). Sub-contracts involve the council’s in-house 

provider (usually catering and cleaning services) working under contract to the PFI contractor. The 

terms of any such sub-contracts include performance indicators and penalties which can be levied 

against the in-house provider which are similar to the provisions included in the main PFI contract 

between the council and the PFI contractor. Examples include a grouped schools PFI in Kirklees where 

catering is provided under a sub-contract and a scheme in Workington, for a new police station, where 

the police authority’s Direct Service Organisation (DSO) acts as a subcontractor for a range of soft 

services including caretaking, vending, grounds maintenance and building cleaning. 

Soft facilities management services such as catering and cleaning are most appropriate to include in a 

sub-contract offer but there are examples (Kirklees) of some building maintenance also being delivered 

by council DSOs in PFI schemes. 

Sub-contract arrangements could be created in one of two ways. 

n First, the council would put itself forward as a potential provider of certain services falling within the 

scope of the PFI contract with the Special Purpose Vehicle; in the case of BSF this could be the 

Local Education Partnership (LEP) or the PFI Consortium. The SPV would be required to seek bids 

for this work from the council but would be under no obligation to accept them in a competitive 

bidding environment. 

n In the second approach the sub-contract would be awarded as of right to the council without the 

need for competition. This could be preceded by a value for money exercise (or even soft market 

testing) to ensure that the sub-contract was in the public interest. 

All services provided to schools could theoretically be provided under a sub-contract arrangement but 

cleaning, catering and grounds maintenance are most likely to be featured in a sub-contract offer.


5. Legal Issues for sub-contractors 

Local authorities have a range of powers available to them which allow them to trade or charge for 

services, including acting as a sub-contractor to non public sector bodies. Such powers can be found 

within the following: 

n the Local Authority (Goods and Services) Act 1970 

n S111 of the Local Government Act 1972 

n S2 Local Government Act 2000 (Power of Well Being) 

n and express powers in other legislation 

n Civic Restaurants Act 1948 

n Local Government Miscellaneous Provisions Act 1976 

n and the new power to charge for discretionary services under S 93 of the Local Government Act 

2003 ( which provides a basis services to public / private bodies ) 

n S 95 Trading Companies under the Local Government Act 2003 

While authorities would be advised to seek specific advice before entering into arrangements using any 

of the above powers it is clear that many local authorities have already successfully use these powers 

to enter into sub-contract arrangements. 

6. Secondment 

Secondments are another way in which in-house services can become involved in BSF PFI schemes. 

Secondments work by allowing staff to remain as public sector employees but they are managed by 

the contractor. The main advantage for employees are that they remain directly employed by their 

public sector employer and maintain membership of the local government pension scheme. 

Some practical considerations that need to be taken into account under secondment include 

identifying which party will have responsibility for: 

n making sufficient staff available to perform the services, and for additional staff or replacement 

staff; line management (sickness absence reporting and the like) 

n work allocation (impact of new technology/new work practices) 

n disciplinary, grievance arrangements 

n discrimination claims 

n performance reviews, training and staff development. 

Secondments do not guard against the emergence of a two tier workforce either, since there are no 

staff transferring their employment to a new contractor and the Best Value Code of Practice on 

Workforce Matters will not apply. This can produce a two tier workforce issue since the contractors own 

staff and the local authority seconded staff can be working alongside each other on different terms and 

conditions. However, there is no legal reason why the local authority cannot seek an assurance from 

contractors that they will employ their own staff working on the local authority contract on no less 

favourable terms and conditions than those that the local authority secondees enjoy. However this may 

be resisted by the contractor and the local authority if it is considered to affect any value for money 

arrangements within the contract or affect the test of FRS 5 (the risk transfer test) within PFI contracts. 

Another cause for concern is that legal challenges could arise where an employee claims that they 

were transferred under TUPE but that the secondment was a mechanism ‘contrived’ to get out of TUPE 

obligations. Such challenges are however, unlikely since local authority staff, protected by their 

27

28 


continuation of employment are unlikely to suffer any detriment to their terms and conditions. 

Equally some good practice examples have recently emerged. In the case of Salford City Council the 

UNISON branch arranged for variations to contracts to be reached with the employees who agreed to 

work under the supervision of the new contractor. This arrangement also provided for the seconded 

staff to be replaced by Salford Council should they leave the employment of the council to prevent a 

gradual transfer of jobs from the council to the contractor. 

A carve out is the best option for in-house service providers since it will not require a TUPE transfer 

and will ensure the continuation of the service within the authority. 


Excluding services, like catering and cleaning, from BSF schemes should be a priority. 

Treasury Value for Money Guidance (August 2004) makes it clear that authorities can retain 

services on a VFM basis. Branches should argue that retaining staff in-house is the more 

flexible, less complex option, with strategic benefits. If services are included in schemes, 

branches should try to negotiate secondments or sub-contracting arrangements. 

7. In house services, Academies and BSF 

APSE’s research shows that the DfES appears very keen to link the BSF to the development of 

Academies. In Manchester there will be 15 secondary schools built or refurbished under the BSF 

programme, but a further five Academies will be developed as part of the proposals. This is in addition 

to the existing Academy in Manchester. In Knowsley one Academy is proposed from the eight new BSF 

schools proposed. In Newcastle one Academy is planned from 11 secondary schools to be built under 

BSF. Branches should be aware of the link between the development of Academies and the BSF 

programme. 


UNISON opposes academies, which, though publicly funded, are independent to set their own 

conditions of service for staff and to impose the ethos of the sponsor, usually from religious 

organisations or business. Further advice can be obtained from the Education Workforce Unit.


Section 5 – 

BSF case studies 

1. Bradford Metropolitan District Council 

Bradford recently moved from a three tier to a two tier system. This resulted in a large disposal, 

rebuilding and refurbishment programme in its own right. Coupled with this the authority outsourced 

its LEA to SERCO operating as Education Bradford. 

To complicate matters yet further, it is also in the advanced stages of implementing a strategic 

partnership for ICT called Bradford Education where SERCO, through acquiring the original preferred 

bidder, has increased its stake in Bradford. The council is simultaneously procuring a further strategic 

partnership to take over its asset management strategy. This is inextricably bound up with the BSF 

initiative in that responsibility for Facilities Management of all council buildings, including schools, is 

likely to transfer to the partner organisation. Discussions over employment models are ongoing with a 

variation on secondment likely to emerge as the preferred solution. 

Bradford’s BSF scheme is for 2 phases initially. Phase 1 sees totally new schools being built at 

Buttershaw, Salt and Tong at a cost of £64m to open in 2008. Phase 2 involves regeneration of 

Beckfoot (Bingley), Greenhead (Keighley) and Grange Technology College. Later phases will extend to all 

schools in Bradford. In late 2004, Bradford invited companies to express interest in bidding for the BSF 

contract as a LEP partner. Out of the initial applicants, three companies were short listed. 

n Integrated Bradford - a consortium led by Amey 

n Environments 4 Learning - a consortium led by Interserve, Barclays Private Equity and Mott 

MacDonald 

n Mowlem Plc 

On 11 January 2006 the Council announced that Integrated Bradford had been appointed as the 

preferred bidder for its £400m BSF programme. Integrated Bradford is an Amey-formed consortium led 

by Amey, Costain and HSBC Infrastructure Fund Management, and supported by a construction joint 

venture of Costain and Ferrovial Agroman, as well as by Sun Microsystems and Amey Business 

Services. 

Discussions have taken place at the joint consultative committee for school based staff but UNISON has 

complained that the provision of information has been sporadic. A number of meetings were arranged 

but given the advanced stage of the procurement exercise they were rather late. At the time of writing 

no list has been drawn up of staff that is likely to be affected and there was no estimate of numbers. 

The first direct meeting between UNISON representatives and the bidders themselves took place late in 

the procurement process. 

The branch has an agreement with the authority for TUPE and the workforce code and does not expect 

any difficulties with pensions. There have been no specific discussions on how this will apply under 

the BSF scheme. 

The Project Board has clearly stated that there will be no scope within the PFI for in-house involvement 

in the delivery of facilities management services. As far as UNISON knows this is not a decision that 

has been made by elected members and has not been debated in any public forum. ECS has been led 

to believe that the organisation will only be able to participate if it is externalised under the Asset 

Management Project (AMP). There is no evidence that any alternatives have been considered, 

including carving facilities management service out 

29

30 


2. Knowsley Metropolitan Borough 

Knowsley sits in the north west of England between Liverpool and Manchester and is one of the seven 

metropolitan councils making up the Merseyside conurbation. It has a population of 151,000. 

Knowsley schools have consistently under-performed in terms of national league tables on educational 

attainment and the elected members at Knowsley were keen to ensure that the future of the council’s 

education service was to raise both educational attainment and investment in the physical fabric of the 

school buildings. However, the statistical evidence for schools performance demonstrated that the 

under performance was not specific to certain wards. 

The council also recognised that there was a growing need to tackle the issue of falling pupil numbers. 

The numbers of primary pupils was examined on an area by area basis to determine the net fall in 

pupil numbers. This decline in primary pupil numbers will have a drastic impact on the secondary 

sector and so the BSF Strategic Business Case within Knowsley set out a series of options to ensure 

that the decline in pupil numbers was dealt with as part of the BSF programme. 

Knowsley has 78 schools, 60 are primary schools, seven are special needs schools and 11 are 

secondary schools. The BSF programme will see the 11 secondary schools replaced by eight learning 

centres. The thinking behind the learning centre approach is that more integrated opportunities for 

cross-agency working can be developed as part of the BSF programme. For example as well as a 

‘school’ the centres will allow access to social services, child psychology services and a range of other 

commonly accessed services by children and young people and their parents or guardians. The centres 

will allow for services to be expanded particularly within the 14 to 19 year provision. 

Knowsley has a high proportion of faith (voluntary aided) schools making up around 48% of the total 

number of schools. PFI is being used for LEA based schools where as the faith schools are utilizing 

conventional funding (Supported Borrowing). Knowsley is also proposing a ground breaking ‘Joint 

Christian Learning Centre’ where intake will be from Roman Catholic primaries, Church of England 

primaries and the community. 

Knowsley has decided to seek mandatory variant bids for the BSF school cleaning contracts but has 

carved out catering services from BSF as it wishes to maintain strategic control of catering to link to 

the council’s health and social objectives. The in-house facilities management team has been 

restructured to respond to the competitive element of BSF and has also had an audit of its costing 

structures carried out by a consultant to identify its market position / contestability. The council has 

adopted a strategy that supports the in-house team providing that value for money can be 

demonstrated through the variant bid process. 

The council has consulted the local UNISON branch. However as with many authorities the consultation 

was initially limited to the representatives looking after the education portfolio. Much wider consultation 

has been necessary as the impact of BSF will go beyond the traditional boundaries associated with the 

education sector, including for example, those UNISON members providing grounds maintenance 

services to schools. 

3. Manchester City Council 

Manchester is in the north west of England with a population of over 440,000. Manchester City Council 

has a history of developing and delivering large scale regeneration projects such as the regeneration of 

the city centre following an IRA bomb attack in 1996 and the Eastland’s area, site of the 

Commonwealth Games stadium from 2002. This has been transformed from a run down area of the 

city with a declining population to one of stable economic growth and an expanding population. The 

BSF programme assumes an increase in pupil numbers in some areas of the city. For example a new 

secondary school is proposed within the Eastland’s site and the projected growth in the school 

population bucks the national trends for declining pupil numbers within schools.


A total of 15 secondary schools are within the BSF programme with seven new build schools and the 

remainder refurbishments. Five new academies are also proposed. The funding available within Phase 

1 of the programme means DfES will provide around £159 million leaving the council to find a further 

£20 million. An opportunity exists to receive a further £100 million in additional capital resources 

through the DfES Academies Capital Fund for the five new academies. 

Manchester is not using PFI for its BSF programme. All the new build and refurbished schools will be 

built using Supported Borrowing (conventional funding). This means that instead of the council 

receiving PFI special grant (PFI credits) to support the cost of repayments for capital works the funding 

from DfES will instead be supported using Revenue Support Grant Formula Spending Share. A report 

to the council’s executive states ‘By adopting a traditional procurement route the council retain greater 

flexibility to introduce its initiatives, in particular around regeneration, community involvement and 

service delivery partnerships as they develop over time’. 

Manchester has not adopted the national LEP model. It has set up a Local Authority Partnership (LAP) 

which is also referred to as the Manchester Local Educational Partnership. This still allows the council 

to bring on board non council stakeholders but ensures that the council retains ownership and control 

over the design and build process. This means that the LAP (Manchester LEP) will be concentrating on 

ensuring that the educational vision of transforming Manchester’s secondary school estate is the focus 

of activity and that the LAP is not tied up into procurement and commissioning issues which are 

already well covered within Manchester’s own officer basis of expert procurement. 

This model addresses UNISON concerns that PFI is all driven through an exclusive private sector 

partner. In Manchester the model allows for private sector design and build contractors to be brought in 

but with the council retaining control over the financing through the use of Supported Borrowing, and of 

other operational arrangements Some maintenance work is included within the BSF programme as an 

incentive to contractors to carry out good quality work. Arrangements where maintenance works are 

included within construction and refurbishment contracts are standard industry practice in both the 

public and private sector. 

Without PFI the in-house services to schools such as catering, cleaning and grounds maintenance are 

left relatively unaffected as schools still have the option, under delegated funding rules, to purchase 

services from whoever they wish including the in-house teams. 

4. Newcastle City Council 

Newcastle is situated in the north east of England, has a population of 260,000 and employs 14,973 

staff on both a full and part time basis. The city has had a successful regeneration programme but still 

has schools that are in some of the most deprived wards in the country. 

The council has adopted a LEP based on the PfS recommended model. This model is a 10 year 

partnership arrangement with the LEA taking the lead on procurement of the schools supported by 

Partnerships for Schools. The LEA / PfS will have a 20% equity stake with the remaining 80%, owned 

by the private sector. 

The council had agreed to test, on a value for money basis, the option of excluding soft services from 

the BSF project by way of a mandatory variant bid. Similar arrangements are in place for managed ICT 

services. Following an assessment of VFM a recommendation was made to the executive of Newcastle 

City Council in January 2006 that soft Facilities Management and ICT services should remain in-house 

and the evaluation of the LEP would not include these elements of the service. 

ICT services have been a particular feature for Newcastle as the council has a strong internal ICT unit 

that currently provides a range of ICT support services to schools. The UNISON branch is fearful that 

this could lead to privatisation of jobs by stealth rather than a strategic decision to include services 

within the PFI scheme. 

Newcastle already has a schools PFI scheme involving a number of primary schools. BSF will bring in a 

mixture of new build, extension and refurbishment schemes. The schools PFI scheme has £60 million 

31

32 


PFI credits to rebuild six primary schools. An additional £148 million of total capital is available to build 

11 secondary schools under the BSF scheme. 

Newcastle will jointly procure the six PFI primary schools and the 11 BSF secondary schools since the 

council feels this will provide better value for money. The schools are a mixture of new build schemes, 

refurbishment schemes and extensions to existing schools. Whether the local authority is using PFI 

through a BSF programme or using PFI to procure primary schools the issues for UNISON are 

identical. The branch has agreed a procurement protocol that covers all areas of contracting out of 

services. 

Newcastle trade unions have worked jointly with UNISON to create shared publicity on the BSF 

programme and also publicise the issues of academy schools. Like many local authorities the BSF 

programme has been linked to the government’s ambition to create Academy schools. The council’s 

executive member for children and young people was reported saying that the council had been “under 

pressure” to accept the Academy proposals. (Guardian Education supplement 1st August 2005) 

London Borough of Greenwich 

(Desktop research) 

The London Borough of Greenwich borders the south side of the river Thames covering some 5,087 

hectares. It has a population of 218,000 and employs nearly 12,000 full and part time staff. The gross 

revenue expenditure of the council in 2004 was £682m. 

Greenwich is one of the early pathfinder schemes for BSF. Greenwich is in the process of appointing a 

Strategic Partner Organisation for the programme in order to achieve the educational vision for the 

borough. Originally the Council had been looking at the development of a “trust” model as an 

alternative to the LEP but subsequently Greenwich has secured agreement from the DfES to test a 

‘variant procurement model’, which is an alternative method to the LEP being implemented by the other 

pathfinder authorities. 

The approach adopted in Greenwich will be compared to the LEP model in order to establish whether it 

provides a realistic alternative that offers better value for money and more effective procurement by the 

DfES and Partnerships for Schools. 

A Strategic Partnering Organisation (SPO) will be appointed to develop and deliver the BSF programme. 

Following an initial pre-qualification exercise, the following organisations have been shortlisted: 

n 21st Century Education 

n Meridian Education Partnership 

n VT Education and Skills 

The secondary school rebuilding programme involves building, remodeling or refurbishing 14 schools 

with maintenance over a 25 year period. Some schools will also provide facilities such as libraries and 

health and social care centres that can be accessed by the wider community. The first phase involves 

building three new schools (Crown Woods, The John Roan and Thomas Tallis) and refurbishing and 

extending two others (Eltham Hill and Plumstead Manor). It is anticipated that these schools will be 

open by September 2009. 

When a private sector partner is chosen, they will be “expected to facilitate the alignment of funding 

streams beyond BSF and provide the means to manage integrated and co-located service provision so 

that the new schools can function successfully as extended schools and a focus for the local 

community” (New Local Government Network NLGN 2005) 

Greenwich’s stated aim is to appoint a strategic partner in order to add to the council’s in-house 

expertise and capacity and work on a wide range of investment initiatives including, but not exclusively 

BSF. The partner will also be expected to manage the supply chain for works and services at each 

stage of the programme. The intention is to involve local contractors in the supply chain.


Section 6 – 

Further reading, help 

and resources 

1. Glossary of terms 

Affordability gap – the differences between the total of the annual PFI credits contributed by central 

government and the annual contribution from school budgets to the cost of the unitary charge. The 

gap also includes the authority’s ongoing project monitoring costs. 

Asset Management Plan – the local authority’s capital investment strategy for its school estate (or all 

council buildings) which provides an assessment of building conditions and the suitability for purpose 

and sufficiency. 

Best and Final Offer (BAFO) - after a contractor bid has been evaluated and received the authority 

may ask the two highest scorers to submit a Best and Final Offer. This takes into account clarifications, 

risks and cost variations resulting from the bidding/evaluation process. 

Building Schools for the Future (BSF) – national programme designed to lift educational attainment 

through a complete transformation of England’s secondary schools. It is a programme of rebuilding and 

refurbishing secondary schools to ensure that England has first class facilities in 10 – 15 years from 

2005/06 subject to future public spending decisions. www.bsf.gov.uk 

BSF Pathfinder Project – the projects selected in March 2003 shape and prove the BSF programme. 

CCT – Compulsory Competitive Tendering. Legislation under the 1980 Local Government (Planning and 

Land) Act and the 1988 Local Government Act which required local authorities to subject services to 

tendering by private contractors. Subsequently repealed by the Local Government Act 1999 which 

introduced the duty of Best Value. 

Commercial close - the stage when the bidder and authority have reached agreement on all the 

contractual documents. Legal agreements can be signed by the differing parties at this stage. 

Commission for Architecture and the Built Environment (CABE) - a national body promoting 

good design of buildings and spaces. Acts as an advisory body to the to the BSF programme in design 

issues. 

Design, Build, Finance and Operate (DBFO) – a contact where a consortium takes responsibility for 

the design, construction, operation and maintenance of a facility for a period of years. 

Conventional Capital – a non PFI related grant or borrowing approval. 

DfES – Department for Education and Skills the sponsoring government department for BSF. 

www.dfes.gov.uk 

Educational Vision – included with the Strategic Business Case this applies to the first major piece of 

work requiring to be done by a local authority. 

Exemplar Designs – the result of a design competition in 2003 they give examples of model schemes 

for BSF. 

Final Business Case (FBC) – the document provided to fund the project – required prior to the 

Financial Close. 

33

34 


Financial Close – This is when the bidder fixes the interest rate incurred on the bank debt that is 

used to finance the project. 

Gateway Review – a procurement project carried out at key decision points by a team independent of 

the project team. The project is managed by 4ps – a local government procurement agency. 

ITN – Invitation to Negotiate. This document is effectively the tender document which includes 

guidance to bidders, the timetable, requirements for bids and the evaluation criteria; the output 

specification, contractual terms and variant bids. 

Local Education Partnership (LEP) – the joint venture company for local delivery in BSF. It is formed 

by the local authority, Partnerships for Schools (PfS) and Private Sector Partner (PSP) 

Output Specification – a detailed description of the functions that the new accommodation must be 

capable of performing. It is split into building and service functions. Only makes mention of outputs not 

how they are achieved. 

PfS – Partnerships for Schools. Quasi governmental body set up by DfES as the delivery vehicle for 

BSF, responsible for both working with the DfES on the national programme, and with all local 

authorities in the programme to scope their educational vision, define their investment strategy and 

procure and deliver their programmes. www.p4s.org.uk 

Partnerships UK – a Joint Venture Company or public private partnership set up under the auspices of 

HM Treasury in 2000 which provides specialist advice and contract documentation on PFI/PPP to a 

range of public sector clients in key areas, including health, education, defence, accommodation, 

transport, environment, criminal justice and IT. www.partnershipsuk.org.uk/ 

Preliminary Invitation to Negotiate (PITN) – provides extra detailed information about the bidder. 

This is only looked at if the bidder satisfies pre-qualification questionnaire (PQQ) requirements. 

Pre-Qualification Questionnaire – bidders expressing an interest in the project advertised in the 

OJEU are issued with a PQQ. This helps decide if bidders have the technical capacity and ability as well 

as economic and financial standing to deliver a project. 

Private Finance Initiative (PFI) – is a procurement route which involves private sector consortia 

raising private finance to fund capital projects which involves investment in assets and the long-term 

delivery of services to the public sector. In BSF, PFI is one of several possible procurement routes being 

funded. 

Private Sector Partner (PSP) – the private sector organisation with which a local authority enters a 

PFI or PPP deal. In BSF the PSP will have the majority stake within the LEP. 

Project Review Group (PRG) – an inter-departmental group chaired by the Department of the 

Treasury. Members are drawn from government departments sponsoring BSF. The PRG assesses PFI 

projects to confirm whether or not they are commercially viable. This will apply to BSF projects with a 

PFI element. 

PFI Credits - these represent a commitment on the part of the government to provide a certain level of 

revenue support to a local authority under the Local Government (Capital Finance) regulations of 1997. 

This is to cover a certain amount of repayment to the servicing of funds borrowed to finance a project. 

Project Initiation Document – this defines a BSF project as the basis for the management and 

assessment of the success of the project. 

Public Private Partnerships (PPPs) the arrangement forged between public and private sector 

bodies that aim to introduce private sector resources and/or personnel to provide or deliver public 

sector functions. 

4ps - 4ps is the local government procurement expert, providing advice, guidance and skills 

development to local authorities undertaking projects, procurement and partnerships. This includes 

private finance initiative (PFI) schemes, strategic service partnerships and all other forms of partnership


working. The 4ps was set up in partnership with the I&DeA, the Employers Organisation for Local 

Government and the Local Government Association. 4ps.co.uk 

School Organisation Committee (SOC) - the SOC considers and plans the annual School 

Organisation Plan for the LEA area. It considers individual statutory proposals for changes to schools 

(i.e. new buildings). 

School Organisation Plan (SOP): each local authority is required under statute to produce a plan 

covering at least five academic years. 

Shareholders Agreement: the agreement between co-shareholders in the LEP proving the basis for 

joint working. Shareholders would include the local authority, Partnerships for Schools and the Private 

Sector Partner. 

Special Purpose Vehicle (SPV) – the company established by the Local Education Partnership to 

oversee individual tranches of the BSF project. 

Standardisation of PFI Contracts (SoPC3) - guidance documentation and drafting produced by 

PUK on behalf of the HM Treasury setting out national standards on PFI contacts. 

Strategic Business Case (SBC) – is the first major document to be submitted for approval in the BSF 

process prior to the Outline Business case. It links together an authority’s corporate and education 

vision and incorporates strategic estate planning. 

Strategic Partnership Agreement (SPA) – the contractual agreement between the Local Authority 

and the Local Education Partnership. 

Supply chain – a term that refers to the arrangements in place through BSF whereby a number of 

contractors and suppliers deliver aspects of the programme from design and construction through to 

the delivery of services in schools (e.g. ICT, cleaning and catering). 

Supported Capital Expenditure (Capital) – (SCE (C) – the capital grant usually paid by DfES to local 

authorities through the standards fund. 

Outline Business Case (OBC) – this sets out in detail the scope, costs, affordability, procurement 

route and timetable for the project which is then submitted to the DfES and the HM Treasury Project 

Review Group for approval. 

OJEU – Official Journal of the European Union is the publication in which the contract notice appears to 

which potential suppliers respond. It was previously the Official Journal of the European Community 

(OJEC). 

Unitary Charge – monthly repayments made by the authority to the provider over the whole life of the 

project. for the services received under the Project Agreement. 

Wave – a cluster of BSF projects in a number of Local Education Authorities that who are funded at the 

beginning of a certain year. 

Wave 2 and Wave 3 Projects – a project granted approval in principle for funding within Wave 2 

(contacts beginning 2006/07) or Wave 3 (contracts beginning 2007/08). 

35

36 


Resources 

A number of key references and sources are given below. In addition many of the documents below 

and other materials are available on both the APSE and UNISON websites: 

http://www.apse.org.uk 

http://www.unison.org.uk 

UNISON 

Positively Public Briefing, August 2005 - Campaign News; PFI companies lack capacity to deliver 

projects; Scotland weighs PFI risks; Good Practice; Reports. 

PFI: Against the Public Interest July 2004. The report analyses the failings of the government’s 

private finance initiative and public private partnerships, highlighting high profile contracts which have 

failed and PFI companies, such as Ballast which went into receivership. 

What’s wrong with PFI in schools – A PFI report for UNISON September 2003. 

UNISON guide to the Best Value Code of Practice on Workforce Matters in Local/Police Authority Service 

Contracts, July 2003. 

http://www.unison.org.uk/acrobat/B840.pdf 

Freedom of Information Factsheet available from UNISON Bargaining Support Group or on the web at: 


Negotiating and Campaigning with the Freedom of Information Acts, UNISON 


APSE 

APSE (2002) The Involvement of DLOs and DSOs in Local Authority PFI Schemes 2002”, APSE, 

Manchester. 

APSE (2003) Staffing Matters in PPP – Technical Guidance Note on Scoping of Services and In-House 

Bids, Briefing 20-02, Manchester. 

APSE Briefing 04/32: Response to the Partnership for Schools on the Proposed Local Education 

Partnership Model as part of Building Schools for the Future. 

APSE Briefing 13/03: Building Schools for the Future: A New Approach to Capital Investment. 

Audit Commission 

Audit Commission (2003) PFI in Schools: Findings from Early Schemes, London. 

Centre for Public Services 

Centre for Public Services (2004), Exclusion of Soft Services from BSF-PFI Contracts 

Centre for Public Services (2003) What Frontline Staff say about Strategic Service Delivery Partnerships, 

(for UNISON), Sheffield. 

Centre for Public Services (2004) BSF Briefing No. 1, for Tyne and Wear UNISON, GMB, NUT and 

NASUWT, May, Sheffield. 

Centre for Public Services (2004) BSF Briefing No 2, Trade Union and Community Strategy, for Tyne and 

Wear UNISON, GMB, NUT and NASUWT August, Sheffield.


DfES 

DfES, (2003), Building Schools for the Future: Consultation on a new Approach to Capital Investment, 

DFES Publications, (2003) 

DfES (2004) Five Year Strategy for Children and Learners, London. 

DfES, (2004), Building Schools for the Future: A New Approach to Capital Investment (2004) 

DfES, (2005), Schools Capital: Investment for All, DfES (2005) 

http://www.teachernet.gov.uk/_doc/7862/DfES%20Schools%20capital%20- 

%20Investment%20for%20all.pdf 

DfES (2004) Local Education Partnership (LEP) Model: Volume 2: Detailed Description of the LEP Model, 

London. 

Freedom of Information 

The website address of the Information Commissioner is www.informationcommissioner.gov.uk 

HM Treasury 

HM Treasury (2003) PFI: Meeting the Investment Challenge, London. 

HM Treasury (2004) Value for Money Assessment Guidance, August, London. 

I&DeA/Employers Organisation/LGIU/APSE/UNISON/T&G/GMB 

Improvement and Development Agency, Employers Organisation, Local Government Information Unit, 

Association for Public Service Excellence, UNISON, TGWU and GMB (2000) Working Together for Best 

Value: Promoting Employee and Trade Union Involvement, London. 

Institute for Public Policy Research 

Institute for Public Policy Research (2004) 3 Steps Forward, 2 Steps Back: Reforming, PPP Policy, 

London 

New Local Government Network 

Delivering Change: New Ways to Modernise by Natalie Tarry (March 2005) for a summary of the BSF 

programme and a case study of the London Borough of Greenwich Pathfinder project. 

Partnerships for Schools 

Partnerships for Schools (2004) Local Education Partnerships: PfS Response to consultation feedback 

on the LEP model, London. 

Partnerships for Schools (2004) Partnering Services Specification Template: Building Schools for the 

Future, October, London. 

Partnerships for Schools (2004) Strategic Partnership Agreement: Building Schools for the Future, Draft, 

August, London. 

Partnerships for Schools (2003), Building Schools for the Future: The Local Education Partnership (LEP) 

Model: Volume One: An Overview of the LEP Model. 

Partnerships for Schools (2003), Building Schools for the Future: The Local Education Partnership (LEP) 

Model: Volume Two: Detailed Description of the LEP Model. 

37

38 

BUILDING SCHOOLS FOR THE FUTURE


39

Designed and produced by UNISON Communications. Published by UNISON, 1 Mabledon Place, London WC1H 9AJ. 

www.unison.org.uk /CU/February06/15335/stock no. 2484. Printer ref. 8613

Building schools for the future - Unison

Create successful ePaper yourself

Delete template?

Save as template?