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Dept for Education and Employment

Answer

Mr. Matthew Taylor: To ask the Secretary of State for Education and Employment, pursuant to his answer of 20 July 2000, Official Report, column 291W, if he will quantify the contribution of each of the three stated causes of the increase in the estimated cost in net present value of the Birmingham LEA schools rebuild package PFI scheme between the outline business case and final business case; and what reasons underlay the reduction in the discount rate used. [132844] Jacqui Smith: The approximate contribution to the increase in the estimated cost in net present value of the Birmingham schools' rebuild package arising from each of the three causes given in my answer of 20 July is: (a) improvements to the output specification--£5.7 million; (b) technical changes to the calculation of the cost of the scheme--£3 million; (c) an underestimate in the outline business case of the cost of operation of the new and refurbished schools--£6 million. In addition, a combination of minor cost increases over the life of the project total £2.1 million. The rate of discount used is set by the Secretary of State for Environment, Transport and the Regions for all local authorities. It is fixed each year and reflects the cost of all local authority borrowing. The rate changed between the outline and final business cases due to changes in the overall cost of local authority borrowing.

Secondary information

Type

Written question

Reference

354 c861W; 132844

Session

1999-00

Subjects

Contracts Costs Buildings Birmingham Private finance initiative Schools Repairs and maintenance

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk