O’Keeffe intends to build on ‘value for money’ mantra
But in the current economic doldrums, he will be keeping a closer eye than any of his predecessors on spending, and nowhere so much as in the Department of Education’s school building programme.
Since becoming Education Minister in May, he has repeated the mantra that he is reviewing spending and particularly so on the capital side of his budget.
But he has finally started outlining areas where he hopes to achieve savings that will help him deliver more projects for some of the 1,400 schools with applications to fund extensions, refurbishments or new buildings — more than 1,000 of them classed as critical or needing urgent repair.
“If I get better value for money I can build additional schools with the funding I have,” he said.
Mr O’Keeffe is seeking the help of a construction industry feeling the pinch of the economic downturn, in a funding model which could also help builders survive.
“If they want to retain their workforce and remain active, this is the ideal time for us to look at a partnership arrangement,” he said.
“They may have sites where we need schools, they would own the site and build a school for us, then we could agree terms in relation to leasing back the school on a buy-back basis over a certain number of years,” the Cork North West TD explained.
He says that such a move would help him enormously in the management of his capital budget but he has the assurance of Taoiseach Brian Cowen and Finance Minister Brian Lenihan that the €4.5bn for school buildings in the National Development Plan remains a priority.
Mr O’Keeffe has met the Construction Industry Federation to discuss the initiative and, although accounting difficulties would mean financing these buildings through the National Treasury Management Agency and would add to Government borrowing, there is scope for individual developers to get involved.
His officials are also looking at extending the use of public private partnerships (PPPs) to fund primary school buildings.
Rather than the traditional PPP model under which the Government has paid private companies to design and build colleges and second level schools, and then maintain them over 25 years, he is examining the possibility of just a design-and-build system for primary schools.
In order to achieve greater savings and maximise the number of projects he can sanction, the minister is urging schools given devolved building grants to be more prudent with the money.
“We have put power in their hands to get much better value for money than they’d ever get through all the bureaucracy of the department, by running projects themselves locally. There are ways now in the present climate, to get even better value,” he said.
All contracts under this scheme will now have to be signed off first by his department to ensure there are no cost over-runs later, and he is encouraging schools — and his own officials — to seek much more competitive prices than those of a year ago.
“I’ll be asking them to get the best possible price in line with the reduction in construction costs manifesting themselves this year,” Mr O’Keeffe said.
The minister also has strong words for architects working on local school projects who have been charging 13.5% of total costs as their fees.
“I’m telling architects they can’t demand 13.5% when we have generic designs for schools, and schools themselves can now take on a quantity surveyor or civil engineer to help on their projects,” he said.
These measures could prove successful if implemented properly but the minister has no clear target on the level of funding it will save — or the amount of extra work it will allow him to carry out.
His predecessor Mary Hanafin had promised last February to announce a batch of projects after Easter which could begin construction but Mr O’Keeffe has refused to make any announcements while his own capital review was underway.
So with what money is left from this year’s €580m budget, will there be good news for more schools before Christmas?
“I have still an amount of money to spend, but I don’t want to be any more specific. I’m hoping that I’m going to make some announcements before the end of the year,” he said.
While he is understandably cautious about making any definitive commitments ahead of next month’s early budget, Mr O’Keeffe can be sure that political life will be significantly harder if some of the schools and their pupils waiting years for new classrooms are not given the go-ahead very soon.
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