Business case for proposed Durand boarding school questioned

St Cuthman's School. Stedham
St Cuthman's School. Stedham

PLANS to build a boarding school for inner city school children on the former St Cuthman’s site at Stedham have received a setback after the National Audit Office expressed concerns about the government’s backing of the controversial scheme.

The concerns have emerged in a letter seen by the Observer written from the auditor general Amyas Morse to the permanent secretary at the department for Education Chris Wormald.

He said he believed ministers had agreed £17m for England’s first free state boarding school, without looking at its long-term viability and the department for education approved funds without fully analysing risks.

The scheme has much high-level backing and Durand head teacher behind the scheme, Sir Greg Martin, was knighted in the recent Queen’s Birthday Honours.

But concerns have been raised about the financial viability of the scheme by the campaign group set up by nearby Redford with Woolbeding Parish Council vwho have long voiced the fear they would be left with a “white elephant” when the project failed.

A spokesman for the group told the Observer: “the strongly worded letters from the National Audit Office and the Public Accounts Committee fully support everything we have been saying about the poor business case behind the whole scheme.”

In his letter to the permanent secretary, Mr Morse said: “I recognise that supporting innovative approaches to raising educational outcomes may require a higher than standard level of risk.

“Strong management practice - including appropriate planning and risk management - is also essential to ensure effective delivery of innovative projects and to safeguard value for money.

“In my view, the department currently lacks sufficiently robust estimates of the financial risk of this project. In part this is because full analysis of future operating costs and revenues has not been carried out.”

Mr Morse acknowledged that the DfE would not release the full £17m it pledged in April 2011 for the scheme before planning permission was granted and ‘a full business case assessment’. But, he said, “some financial exposure already exists ahead of the main capital investment”.

In a letter to parish council chairman Anne Reynolds public accounts committee chairman Margaret Hodge said: “It is clear to me that either the department has not kept sufficient records of the work it has undertaken on this project, or that it did not undertake sufficient work to have the full understanding of the project risks at the point it initially decided to award funding.”

She said she remained concerned about the scale of uncertainty in several areas of the project.

The DfE said in a statement: “Durand is an innovative and inspirational project which has enormous potential. The National Audit Office is clear that it is satisfied that the procurement process for this project is robust.

“We will of course produce a full business case once planning issues have been resolved and the full scale of investment is clear. Only then will the money be committed.”

Sir Greg Martin said his school had a track record in successful delivery of innovative education projects.

“Innovation in education is never easy. But if no-one pushes forward, if no-one pushes the boundaries, we all end up standing still.

“This is a new model, but revenue forecasts, capital costs and savings plans for the boarding school have been examined in depth and approved by the school’s financial advisers.

“The Department for Education has also concluded that Durand’s innovative cost plan is viable - as reflected in the school’s funding agreement with the secretary of state.”