Midlothian Education department have stated that all 7 new PPP Schools will be built in 12 months, latterly revised to 14 months, and will be ready for occupation in December 2006. This means Midlothian believe that the PPP2 Schools Programme can be completed in 31 months from June 2004. At the Rural Schools meeting on 26 April with Midlothian Council we requested evidence of which Council has completed a 7 multi-school PPP programme. We were told that no evidence could be provided.

• Why is it that Highland Council has publicly announced that it will take 39 months to completion of their first school and 75 months to completion of the last school in their PPP2 Schools Programme?
• Why is it that South Ayrshire need 24 months construction period to complete 7 schools? This 24 month period does not include the procurement, contract negotiation and design periods.

Our research shows that it is more likely that Midlothian’s programme will take 39 months and the new schools will be ready in August 2007

Whilst it is possible to complete one, two or at a stretch three primary schools in 32 months and a 12 to 15 month programme, PPP Consortia (Architects, Engineers and Contractors) will not want to commence, design or construction of all 7 schools simultaneously. To guarantee completion, Consortia are likely to employ 2 sets of Architects and 2 sets of Contractors. This increases co-ordination and costs. Consortia are likely to qualify their bids and propose a programme, which suit them. Given the size of the Scottish PPP2 programme and volume of work available, Consortia are likely to qualify their programme periods in their bids to suit themselves.

Midlothian Council have sought tender proposals from Technical Advisors to assist with the delivery of the PPP2 Programme. Technical Advisers have not yet been appointed. They are unlikely to be appointed until Midlothian Council make their final decision on the future of the Schools, which could be mid to end May. This further reduces the time available to December 2006 to 31 months from June 2004.

We have requested that the Council confirm which new sites have been acquired for the new Schools. In the case of Stobhill, Midlothian’s in-house PPP officer, stated that the Stobhill site is big enough for the new School has made conflicting statements. A councillor stated that the council owned the field at the rear of the school. Either a phased construction site will be needed on the existing site or new land will need to be acquired. Does the council own the land? Or does it need to be acquired through a Compulsory Purchase Order. Also to finish 7 schools in December 2006 the contractors would need to commence earthworks, foundations in the Autumn of 2005 / Winter of 2005/2006. It is not accepted construction practice to start construction projects in the winter. All of these factors create issues and problems and despite many requests for information we do not yet have clarity on Midlothian’s programme.

The estimated completion date of December 2006 makes no provision for installing furniture, IT Data cabling telephone wiring, and making the school ready for occupation. We provide below a realistic schedule of dates which shows that the first school will not be complete by December 2006 and is more likely to be ready for occupation August 2007 in 3 years time. We invite Midlothian to show us the evidence of why our research is wrong. Why move the children now and move them again in 3 years time?

Despite assurances from Midlothian’s Council that the new Scottish Schools PPP Contract accelerates Contract Close, experts in the PPP industry, still proclaim problems with contract negotiations; risk transfer on land acquisition, planning permissions, etc. Amey Miller have fallen out with the City of Edinburgh Council, Ballast Wiltshier’s Dutch Parent Company pulled the plug and left East Lothian high and dry. Was Midlothian lucky that HBG’s Dutch Parent Company allowed them to finish the Dalkeith Campus? How many Contractors are left who are interested in large scale, fast track PPP projects? AWG, Balfour Beatty and newcomers Amec or Skanska? How many other Consortia would be interested? Its too large for HBG / too fragmented for HBG.

Midlothian’s programme assumes that the Consortia bids will be less than the Outline Business Case approved by the Scottish Executive in 2003. The Scottish Executive has announced a £1.15Bn PPP2 programme which is being delivered 2005 to 2007/8. Construction inflation is rampant, labour is in short supply particularly around Edinburgh, the few remaining contractors will cherry pick contracts and raise their prices. Will there be true competition for the PPP2 projects? Will they ever be built in the way that Midlothian’s Cabinet Paper suggests? Midlothian has until 2006 to sign off the contracts with the Scottish Executive; the buildings do not have to be completed in this timescale. The Executive can halt the PPP process if it thinks the programme is undeliverable.

We enclose overleaf a detailed PPP procurement and delivery programme, to compare with the dates from a letter from the Director of Education. We would like to compare our programme of dates to find out where Midlothian have obtained the evidence to demonstrate, confidently, that the programme can be delivered in 31 months from June 2004.

Midlothian has until 2006 to sign off the contracts with the Scottish Executive; the buildings do not have to be completed in this timescale. The Executive can halt the PPP process if it thinks the programme is undeliverable.

We have provided detailed comments regarding the challenging timescales in Midlothian's PPP2 programme. The Scottish Executive have confirmed to us that, the only time limit on PPP2, is Approval of the Final Business Case by December 2006. This Final Business Case needs to be approved by Partnerships UK, Audit Scotland and the Scottish Executive themselves.

These approvals take time and there will be many other Scottish Councils with submissions in the approvals process. Midlothian could re-structure their programme and choose to build the schools sequentially in a manner that suited the contractors and delivered best value. Building them all at once presents risk which the Contractors will price in or they will qualify their tenders.

Also Midlothian's office responsible for PPP has made great play of the new "Standard Scottish Schools Contract" which is supposedly going to speed up contract negotiations. Where is the evidence for this? The Standard Contract was based upon the East Lothian contract, which of course was not a great success with Ballast Wiltshier going into liquidation because their Dutch Parent Company refused to back them. Although the standard contract has all the clauses you still have to insert the project particulars e.g. Termination provisions, what constitutes a warning notice ,etc. Also some terms in the contract are not accepted by the banks. These are the thing that take time with a preferred bidder to agree the specific terms for a project. Renfrewshire council is going to be the first to use the Standard Contract. Reports suggest that negotiations are not going as smoothly as people expected.

Councillor Macintosh asked us to provide evidence at our recent meeting. We are providing evidence. Midlothian does not need to rush into the PPP2 programme with a drop dead completion date of December 2006. Whilst Dalkeith Campus was completed on time (how long did the final business Case and contract negotiations take compared to the original plan) we strongly advise Midlothian takes a measured approach in structuring the amount of work, the timings and the contract conditions in the PPP2 project.

Why close schools now when there is uncertainty regarding completion dates and opportunities to use pupil demand from new housing developments. A flexible approach would seem the most prudent course.