Lessons from the 'Building the Education Revolution' program

Recently I co-authored (with Brian Dollery and Michael Kortt) a paper published in the International Journal of Public Administration titled 'Building the Education Revolution: Another Case of Australian Government Failure?'. The paper focused on the $16.2 billion BER scheme, which, as of May 2012, funded 24,000 infrastructure projects in approximately 9,500 schools through the construction of multi-purpose school halls, science labs, libraries and other facilities.

Our discussion, which utilised analysis provided by the BER Implementation Taskforce, received both opposition and support when reported in The Australian (Stefanie Balogh, 'Labor's BER reforms 'a case study of failure', The Australian, April 1, 2014, 1). For example, Labor's education spokeswoman Kate Ellis states the paper 'does not adequately reflect the positive impact the BER has had on schools and communities across the country, which should be a key measurement applied here'. In contrast, the Education Minister Christopher Pyne supported the paper for highlighting the BER's failure to require value for taxpayers' money.

There are a number of justified criticisms of the BER. First, while the Taskforce received 332 complaints, representing just 3.5% of all schools involved, it also estimated that $1.1 billion was wasted in delivering public school buildings to NSW and Victoria when a comparison is made with the performance of Catholic counterparts which had similar centralised control structures.

Second, we argued that the BER was a legislative failure given that the rollout occurred after the worst of the impact of the global financial crisis hit the Australian economy. With BER expenditure increasing rapidly from November 2009 until November 2011 before rising at a slower pace, the economist Warwick McKibbin (and then Reserve Bank Board member) indicates that rising interest rates from October 2009 were a sign that the stimulus package was too big (David Crowe, 'The stimulus we didn't really need', The Australian, 17 August 2013, 17).

Third, we highlighted design faults to indicate bureaucratic failure. With a lack of capital program technical expertise within DEEWR (the then Department of Education, Employment and Workplace Relations), such as construction project management and quantity surveying, the Taskforce indicated that this may have prevented better program design and implementation of the BER.

The Taskforce noted that DEEWR's reporting and monitoring requirements did not adequately capture 'value for money' factors. Even the revised August 2009 BER Program Guidelines, which included a requirement for projects to demonstrate 'value for money', provided no definition nor any requirement that education authorities report 'value for money', or offer any mechanism for assessing the quality of the built outcomes beyond delivery and completion of facilities.

A variety of complaints were made, including the scale of fees; costs per square metre; a lack of detailed cost information; inadequate site supervision, with some school principals frustrated that they were not managing projects themselves or were spending excessive time on project management activities; unnecessary management fees; differences over what the school management and school association wanted to use the available funding for; inadequate school consultation which created frustration in school communities; tight time frames with limited consultation and assessment of alternatives options; unexplained delays in the commencement of projects and/or changes to the timetable after commencement, particularly site preparation; limited flexibility afforded by the defined list of product types; and capped funding based on enrolment numbers, which restricted some schools from addressing pressing needs.

However, our paper did indicate that most jurisdictions and school systems were successful (besides the NSW and Victorian government systems which had 72 per cent of complaints despite delivering just 37 per cent of the program).

In regard to government schools, where it is often argued that decentralisation can improve service efficiency because lower tiers of government better match public goods to local preferences, the Taskforce praised the government systems of Queensland, Western Australia, South Australia, the Australian Capital Territory, and Tasmania in terms of 'value for money'. Collectively, the five government systems received about 15 per cent of complaints despite representing 30 per cent of the program.

WA was commended for implementing a well-designed program with attention to detail, with effective centralised control also involving school communities. Queensland also engaged numerous construction firms and made efforts to ensure stimulus work was delivered broadly across different parts of the industry with specific direction for construction managers to engage smaller builders.

Catholic and Independent schools also fared well with just 12 per cent of complaints despite using 31 per cent of the funds.

The Taskforce noted that the Catholic and Independent schools generally built quality new school facilities founded on existing master plans which ensured rapid implementation to address infrastructure needs and deliver good outcomes in terms of cost. Catholic and Independent school education authorities already had strong governance structures and management systems which generally allowed them to utilise their own business model that usually employed a greater level of 'in-house' resources, although sometimes adding staff to existing capital works capabilities.

So why did the Victorian and NSW government schools have the most complaints? Why did a 2010 survey of 300 members by the Public Schools Principals Forum find that 60 per cent of NSW public school principals believed that the BER did not deliver value, while another December 2010 survey by the NSW auditor general found dissatisfaction from 41 per cent of principals (Anthony Klan, 'BER waste tops $1.5 billion', The Australian, July 8, 2011).

The Taskforce noted that high quality projects in NSW and Victoria were offset by many projects performing poorly in terms of both cost and observed quality; that their approach often 'disenfranchised' school communities instead of involving them in the decision-making process; and, while the Queensland government possessed the requisite technical capacity for capital works project oversight, public works management capacity in NSW and Victoria suffered higher costs due to their limited ability to act prudently in an environment where many services are outsourced.

The NSW government also had high total project costs which reflected the relatively high fees paid to managing contractors; used templates generated by architects engaged by managing contractors for use exclusively on those managing contractor's projects; had just a small percentage of its schools self-managed by schools and principals; and used an overly expensive and sophisticated delivery approach to deliver relatively simple, small and medium size projects in contrast to other states and territories.

To conclude, based on the Victorian and NSW government experience alone, our analysis offers two critical observations that should withstand any political slant seeking to attribute policy success or failure to the BER. First, waste would have been minimised if the public service had more technical expertise. The Taskforce notes that the total number of state government employees (across all Australian jurisdictions) listing their occupation as 'civil engineer' declined from 4,480 in 1976 to 2,547 in 2006, a trend also evident in terms of qualified architects. Second, given the success of the non-government sector and elements of several state governments, there are sound reasons to support greater school autonomy given that principals and local school communities are better placed to encourage value for money.