Cutting maintenance

[DaveBrigg]

We've just been told that the capital budget for schools (the money used for maintenance and repairs) is to be cut by 80%. The amount will be shared equally, avoiding the need for a local authority bureaucrat to allocate it to where it is most needed. Part of our school is 350 years old and Grade II listed, with another large part mid-Victorian.
I suppose that considering the hardships faced by others, it is a bit churlish to question the economic arguments of letting our schools crumble into disrepair.

It's not all gloom though. Eton is believed to be unaffected by this measure.

 

[middi]

Perhaps you school will have a larger allocation of umbrellas DaveBrigg :wink:

( ridiculous!!!!)

Middi

 

[Nigel Watts]

Not sure I understand this. Minor repair and maintenance scores, from a government and Treasury accounting perspective, as revenue expenditure. Only buying new or replacement equipment above a certain value and putting up new buildings, extending existing ones or major refurbishments score as capital.

From being pretty freely available under the Brown regime (on the rather simplistic grounds grounds that capital = investment and therefore must be good for the economy and only revenue expenditure has to be balanced over the economic cycle - known as the "golden rule") capital is now being cut more than revenue in most departments. If the local authority is holding back a portion of the revenue budget needed for minor repairs then opt out may be the answer. If there is a large backlog of repair work due to mismanagement in the past things may be trickier I guess.

 

[biffvernon]

We've just been told that the capital budget for schools (the money used for maintenance and repairs) is to be cut by 80%. The amount will be shared equally, avoiding the need for a local authority bureaucrat to allocate it to where it is most needed. Part of our school is 350 years old and Grade II listed, with another large part mid-Victorian.
I suppose that considering the hardships faced by others, it is a bit churlish to question the economic arguments of letting our schools crumble into disrepair.

It's not all gloom though. Eton is believed to be unaffected by this measure.

The government's position is that you should have fixed the roof when the sun shone.

 

[Carol]

My school, built 1873 is to be cut completely. Will probably become someones' luxury period residence or be demolished. Rescue efforts are hampered by the costs of maintaining it

 

[CatherineB]

Not sure I understand this. Minor repair and maintenance scores, from a government and Treasury accounting perspective, as revenue expenditure. Only buying new or replacement equipment above a certain value and putting up new buildings, extending existing ones or major refurbishments score as capital.

From being pretty freely available under the Brown regime (on the rather simplistic grounds grounds that capital = investment and therefore must be good for the economy and only revenue expenditure has to be balanced over the economic cycle - known as the "golden rule") capital is now being cut more than revenue in most departments. If the local authority is holding back a portion of the revenue budget needed for minor repairs then opt out may be the answer. If there is a large backlog of repair work due to mismanagement in the past things may be trickier I guess.

Nigel, I am finance manager for a state primary school, and I can assure you I understand what Dave is saying! Regardless of what we call our expenditure, if our income comes in two pots - revenue and capital - and one is slashed while the other (if we're lucky!) stays the same, then the school's income as a whole goes down.

Schools spend the vast majority of their revenue income on staff costs, and other running costs such as curriculum items, utilities and other services (including, yes, day-to-day maintenance) take up the rest. Little revenue is left over, I can assure you, to set aside for a rainy day - if, indeed, we were allowed to do so (current maximum surplus revenue that my school can carry forward at any year-end is 8% of the school's annual income).

Schools are expected to have a three year capital expenditure plan, and it is out of this capital pot that "minor repairs and maintenance" such as replacing the school roof, a new boiler, or (perish the thought) rewiring an old building, must inevitably come.

If you are suggesting that schools are mismanaging their maintenance because they have a running maintenance programme that depends on receiving £xx per annum over the next few years to cover "minor repairs" such as a new roof, replacement boilers, or a new computer server, then yes, I agree, you certainly have not understood!

In the end it's all robbing Peter to pay Paul, and we all know that budget cuts have to come from somewhere, and I’m not getting into any argument about where they should come from. However, to say that schools should simply allocate ""revenue" funds to pay for maintenance that might otherwise be taken from their capital pot, is a bit like Marie Antoinette saying “Let them eat cake”!

Rant over

 

[Nigel Watts]

Government rules prevent the use of capital for revenue expenditure so minor repairs can't strictly be funded out of anything other than the revenue budget, but as you say the replacing of a roof, a new boiler or rewiring would need capital and this does look to be in very short supply just now for schools. I am not unsympathetic I assure you.

Some of the pictures I have seen on TV however about the poor state of school buildings suggest strongly to me that a little more annual maintenance would have prevented much of the deterioration. Some schools, I suspect, took their eye off this particular ball hoping that they would get a major rebuilding project approved.

Capital has not been cut to zero so there must be some process for rationing it out. How is this done?

 

[CatherineB]

Sadly I didn't get a crystal ball for Christmas (I ask every year), so we're still waiting to find out what the new capital funding allocations will be! Ditto the new revenue funding formula. With the new financial year starting on 1st April, the earliest that schools are guaranteed to know their funding for next year is - er - 31st March.

I suspect that's normal for the public sector, and of course in the real world your average business doesn't have the foggiest what their income will be

 

[Nigel Watts]

Catherine I recognise this position of uncertainly as to government funding only too well. I was until recently Finance Director of an NDPB whose task was to dispense half a billion or so each year to universities and other academic research organisations. Our biggest challenge - one which you no doubt would envy - was to spend the money fast enough so as not to end the year giving a substantial amount back to the Treasury. Some of those running units were pretty skilled at making the money go further than was intended - ie spending too much on the front line activities and not enough on maintaining the infrastructure - confident that when faced with a damning Health and Safety report or such like Head Office would inevitably bale (bail?) them out. One can hardly blame them for doing so in our case because historically we always would. How times have changed!

 

[CatherineB]

It does indeed sound familiar, Nigel! The "use it or lose it" approach to funding has positives and negatives - the negative is that inevitably establishments will spend money on "nice-to-haves" rather than see it clawed back, when it might be more prudent to keep it for a rainy day.

And as previously noted, we now all need our umbrellas!

 

[Pford75]

of course in the real world your average business doesn't have the foggiest what their income will be

Not true - I measure forecast accuracy across a team covering 133 countries and over the last calendar year, they were 99.15% accurate when predicting 1 quarter ahead and 97.20% accurate when predicting 1 year ahead.

The difference in the private sector is that if you fail to predict your income accurately, you tend to go out of business....something which the public sector has been sheltered from.

 

[Nigel Watts]

a team covering 133 countries and over the last calendar year .... were 99.15% accurate when predicting 1 quarter ahead and 97.20% accurate when predicting 1 year ahead.

Hmmm. I would be a little sceptical here. The politics of setting and making budgets, skill in shifting money between financial quarters via accruals... I once worked for a multinational and the ingenuity of local country managers in this respect was astonishing.

 

[Moo]

Many, many decades ago I worked in a school under the most wonderful eccentric, inspirational headmistress.
Capital costs were known as 'Estimates', and requests for funding had to be submitted every year: during my first year I was summoned to her office, asked why my department's list had been so modest, and told to resubmit a more extensive (expensive) one. Her reasoning was that (a) the committee would only think they were doing their job if they cut a certain percentage and (b) the rest of the local heads would try to earn brownie points by giving the impression of extreme frugality. So she always made a point of putting in quite outrageous Estimates to give the committee the satisfaction of making their petty economies, and to mop up the surplus that the other heads had provided.
That first year was easy, but as time went on it became quite difficult to think up yet more luxurious extras.

 

[Flyfisher]

a team covering 133 countries and over the last calendar year .... were 99.15% accurate when predicting 1 quarter ahead and 97.20% accurate when predicting 1 year ahead.

Hmmm. I would be a little sceptical here. The politics of setting and making budgets, skill in shifting money between financial quarters via accruals... I once worked for a multinational and the ingenuity of local country managers in this respect was astonishing.

I recognise both those scenarios. Quarterly revenue forecasts in project-based IT businesses were always, in my experience, fairly easy to forecast because it was mostly down to delivery, with the actual contracts already having been won. Actually, the emphasis on quarterly reporting was more of a PR exercise arising out of the legal reporting requirements of public companies. One year forecasts were rather more volatile since much of the business required was yet to be won, though even then, with many tenders taking up to 18 months, there was always a high degree of business visibility even one year ahead.

But Nigel is absolutely right about the 'internal politics' involved and our revenues rarely exceeded the minimum figure needed to maximise the various bonus schemes in place. There was, of course, always a risk in carrying forward too big a backlog in case one's operating budget was 'adjusted' accordingly, though that was usually only an annual hazard rather than a quarterly one.

However, whilst that might all sound like fun and games amid large revenues and profits and bonuses, the very serious underside was that missing the quarterly numbers (generally visible well ahead for the reasons mentioned above) led to almost immediate pressure to trim costs (or, possibly, adjust sales margins) in order to maintain the profit lines in the operating plan. I remember more than one occasion when a last minute "surprise" loss of a large contract meant the almost immediate loss of many jobs. Such an environment certainly focuses the mind.

 

[DaveBrigg]

The difference in the private sector is that if you fail to predict your income accurately, you tend to go out of business....something which the public sector has been sheltered from.

Unfortunately, predicting income in this part of the public sector is very difficult, and getting worse. We don't charge our 'customers', so funding is at the whim of politicians. We were told last week that the allocation of money per sixth-form student is to be slashed, cutting several thousand pounds in one stroke. We also get hit with unforeseen expenses. A recent OFSTED change meant that a school could be failed, and put in special measures, for having insufficient security. Within weeks, a few hundred metres of steel fencing had been erected around the site, blowing a large part of the capital budget on something that hadn't featured on any plan.

As for mending the roof when the sun shone... that was what the Building Schools For The Future was all about. There are a couple of state of the art schools in our authority now, but we were not due until 2016. Locally, the LEA helped with funds for a new canteen and we got rid of the portakabin used for Geography lessons, but a 17th C roof doesn't stay mended for very long before the tiles start slipping again.

I can agree with Catherine that the refusal to allow schools to carry over funds is ridiculous, and even more so now that the LEA are not to be involved. With such drastic cuts there is no chance at all to save for a new building or major refurbishment, and no-one to turn to for help. As far as I know, capital budgets are to be shared equally between schools with no regard for need. Good news for those in a BSF new-build, but less welcome for a listed school with decaying cast iron downpipes and windows that need scaffolding before a broken pane can be replaced.

Nigel is also spot on in commenting on the historic neglect of maintenance, although the reason is more to do with ignorance and cost-cutting than any devious plan. We used to get a council surveyor who would visit and give advice. This service is now in doubt, and given that the cost of getting someone from the private sector for a day is more than paying a classroom support assistant for a half-term, I can't see it happening very often. Schools are judged more and more on their exam results, so when times are hard, spending on anything not directly related to this is often seen as a waste.

We thought about umbrellas, but buckets are cheaper.

 

[Flyfisher]

Unfortunately, predicting income in this part of the public sector is very difficult, and getting worse. We don't charge our 'customers', so funding is at the whim of politicians.

. . . instead of at the whim of customers. Get things wrong in the private sector and your customers go way. Completely. Forever. The public education sector may 'suffer' budget variations but there's little danger of it going bust. I understand the pension plans are quite attractive too.

 

[DaveBrigg]

The public education sector may 'suffer' budget variations but there's little danger of it going bust. I understand the pension plans are quite attractive too.

We appreciate that we have better job security than many, although a sizable number of workers in the LEA education dept got their redundancy notices last week, to join those going in March, and our school has cut staff through not replacing those who leave.

As an example of how funding is affected by political whim, we are now expected to compete for pupils with other schools, encouraging parental choice. Fair enough.
Any parent researching different schools will be familiar with league tables. The latest white paper proposes altering the league tables to count not the number of pupils with 5 A*-C GCSE's, but to use the 'English Baccalaureate instead. In effect this is a particular combination of subjects that can include Latin or Ancient Greek, but discounts any practical subject or technology. However, in Gove's surreal attempts to purge any trace of New Labour the table will be calculated retrospectively. A case of moving the goalposts a season after the match has finished and then recalculating the scores. By happy chance, our school taught the right subjects last year and has shot to the top of the league table, way above our nearest rival. Several schools that gave pupils a good education based on their needs now find themselves at the bottom, on 0%. The situation will stay the same next year, because it is too late to start again for year 11 pupils, but some year 10 students will find last term's work in the bin next week and a new subject being taught in order to avoid 0% in 2012.
Any parent looking at a league table could be forgiven for thinking that our school is streets ahead of any other, and so our numbers may shoot up. Conversely, those on 0% will have to convince parents that their students didn't actually leave with nothing, they just didn't gain a qualification that wasn't actually on offer at the time. Each pupil comes with extra funding, so if even a dozen pupils switch to our school the broken upstairs windows can be fixed and the bargeboards repainted. Schools that have overnight gone from the top of one league table to the bottom of the other will find themselves suddenly dropped deeper in the red.

As for pensions, far more public than private sector workers contribute to their pension scheme. The majority of public sector workers will receive a pension of less than £5 000 pa. and contribute more than the 4% proposed for the NEST scheme. That's by the by. I'm not complaining about my job. It's just going to hurt watching another old building moulder away.

 

[Nigel Watts]

League tables are always going to be problematic and an insufficient measure on their own. Westminster School, alma mater of Tony Benn, Ruth Kelly and Nick Clegg, has consistently come bottom of the tables for GCSEs across London in spite of being one of the most ruthlessly academic selective schools in the country. The reason? They choose to do the harder IGCSEs which are unrecognised and score zero.

I dont have the problem of having to find a state school for my children as I am lucky enough to be able to afford (just) to use the private system, but here too we still have the issue of choice. My eldest, as it happens, is academically inclined and diligent with his studies. He goes to a highly academic school and it suits him well. My youngest, although bright, is not so obviously academic and is more easily distracted from his work. Sending him to a highly academic school (assuming we could get him in), where he might bump along the bottom, may very well be a poor choice.

Children are different in all kinds of ways. A particular type of school may well suit one child perfectly and another not at all. In an ideal world there would be a spectrum of different kinds of schools, all excellent in their own way, with parents having the right to choose which one would suit their child the best. This would be hard to achieve of course, and possibly even resisted by those who believe that one of the main purposes of education is social engineering.

 

[Moo]

Sending him to a highly academic school (assuming we could get him in), where he might bump along the bottom, may very well be a poor choice.

Very wise words, Nigel.

As a result of passing the 11+ I went to a highly selective academic school and came out convinced that I was one of the 'less able' pupils because I was invariably in the bottom half of the class. Your son is a lucky chap, having such a perceptive dad.

 

[Flyfisher]

Yes, some good points Nigel. I was never too bothered about school league tables as they seemed to me to be rather too far removed from most parents' main concern. It doesn't really matter what grades other children achieve, as long as their own children achieve their full potential.**

School league tables are a very crude measure of this and I know of many pupils who have been refused the option to take some subjects because they were not their best ones, or who have been strongly discouraged from taking A-levels in certain subjects for the same reasons. Metrics certainly can certainly drive behaviours, but not always in the direction originally intended.



**Perhaps I'm still smarting from being forced to take O-level french instead of my favoured geography, though that was in the days before league tables. I will, of course, never know my full geographic potential, though I have a sneaking suspicion it would have been rather better than my almost complete french failure.