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Dept for Education and Employment

Answer

Mr. Matthew Taylor: To ask the Secretary of State for Education and Employment what estimate he has made of the cost of the Birmingham LEA grouped school refurbishment PFI project at each stage of its development; if he will list the causes of significant change in costs; and if he will make a statement. [131586] Jacqui Smith: Birmingham local education authority's outline business case for the school rebuilds package PFI scheme was approved by the Treasury-chaired Project Review Group in December 1998 at an estimated cost in net present value (NPV) terms of £61.2 million. A contract was signed in February 2000 on the basis of a final business case which estimated the cost of the scheme, in NPV terms, at £78 million. The main causes of the increase were: (a) improvements to the output specification--for example, to accommodate children with special needs in mainstream schools and to improve sports facilities; (b) technical changes to the calculation of the cost of the scheme--for example, the fall in the local authority rate of discount from 8.9 per cent. to 8.4 per cent.; (c) an underestimate in the outline business case of the cost of operation of the new and refurbished schools over the 30 year life of the contract. The local authority has confirmed that this PFI scheme provides better value for money than would have been achieved through conventional procurement.

Secondary information

Type

Written question

Reference

354 c291W;354 c292W; 131586

Session

1999-00

Subjects

Costs Buildings Birmingham Private finance initiative Schools Repairs and maintenance

Contains statistics

Yes

Link

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