Remember those heady days of 2006 when the antediluvian chancellor Gordon Brown set aside £36 billion for a four-year refurbishment and rebuilding programme to make schools and colleges in England “fit for the 21st century”?
The great financial crash of 2008 saw off most of it, but not before contracts were signed for a large chunk of work. And the coalition government was only too pleased to take the credit, since they were in power when many of the spectacular buildings were completed – despite slagging off Labour for profligacy and waste when in opposition.
So, with mergers aplenty and much rationalisation of provision following area reviews, government officials – not least those working for the Skills Funding Agency (SFA) – were rubbing their hands with glee at the prospect of getting hold of all that money tied up in colleges. The order is going out, therefore, to get independent professional assessment of just how much your stock is worth.
A fly in the ointment
Such an instruction went out to Bournville College, which is set for a super-huge merger with South and City College, and possibly also Cadbury Sixth Form College, as part of the Birmingham area review. Bournville’s state-of-the-art campus spans 4.2 acres and serves an estimated 15,000 students. It was completed in 2012 at a cost of £66 million – part of a total £84 million rebuild package.
When the SFA asked Bournville to get a valuation of all its property, the directors said that they were in full agreement that it was needed. But there was one small problem, they explained: they couldn’t afford to pay for the valuation to be done. No matter, responded the SFA, the agency was happy to foot the bill.
So everyone was stunned when the valuation by Savills, the highly regarded real estate assessors, came in at £17.5 million. FErret, for one, almost choked on his chicken, when one source lightheartedly quipped that this was thought to be the cost of former principal Norman Cave’s spacious, space-age office alone. Adding insult to injury, a nearby annex built for £6 million was valued at a paltry £1.5 million.
College for sale, barely used
One helpful soul suggested: “Isn’t this because the cost of construction bears little relation to the resale value with specialist buildings?” Well yes – up to a point, Lord Copper. But looked at this way, things are even worse. In the event of a sale, wouldn’t the college (and the SFA) recover more cash were the building to be put to an alternative use? Not necessarily. Savills replied that the property would then be worth even less – around £10-12 million.
This reportedly came as quite a shock to some officials, but FErret consulted a few real-estate experts who said that no one should be surprised. One company that is quite heavily involved in the college scene said: “The cost of building educational premises is high and it’s not easy to find alternative use. But the [programme of] building schools and colleges for the 21st century was all about expanding FE, not closing it down.”
So, Bournville is not an isolated case. But that won’t stop people asking: where exactly is the benefit of the public investment?