Listeners to the Today programme recently may have heard a tepid defence from David Laws of the Priority School Building initiative. Great news, he said. Good progress is being made with some of the schools that are directly funded with government capital. He was less keen to speak of the vast majority of the programme, slated to be delivered using private finance where progress, for many of the schools involved, has felt glacial.

However, those schools fortunate to be in the early batches are seeing some movement and the time is right for those in the next phases to begin to engage.

One of the first concrete steps such schools will be asked to take will be to sign a Memorandum of Understanding, or MoU, with the Secretary of State.

Why is an MoU necessary?

Each new school is being built as part of a batch, to deliver economies of scale and procurement efficiencies. There will, however, only be one contract signed by the Secretary of State (SoS) with the successful bidder covering all the schools in a batch. There will be a significant co-ordination exercise required on the part of the Education Funding Agency (acting on behalf of SoS) to ensure all schools in a batch keep to the timetable and are ready to commit simultaneously to the final deal. The MoU provides a commitment from each school to play its part in ensuring the procurement progresses according to plan.

Who signs the MoU?

Each school has its own MoU with the SoS (though they will all be in a standard format). Depending on a school’s circumstances, it may be that the EFA wants the school to persuade other parties to sign the agreement also. These may the landowner, if the freehold to the school site is not owned by the school, and / or the employer of staff currently providing facilities management services to the school (if not the school itself). This is because information will be required from these parties to enable bidders to submit accurate, unqualified bids and they may be required to enter into further agreements with the SoS as part of the final deal.

What are we signing up to?

The MoU explains the roles and responsibilities of the parties during the commissioning process with a view to enabling the smooth progress of the procurement.

It identifies what is expected of the school in relation to provision of information, the timing and extent of engagement with the process, and the requirement to enter into a further agreement (the Governing Body Agreement, or GBA) when the SoS signs the overarching Project Agreement with the successful bidder.

Perhaps the most significant provisions in the MoU are those that set out the financial envelope for the payments the school will have to make to the SoS once the new facilities are built, together with confirmation that the Schedule of Accommodation and the overall size of the proposed build are adequate to deliver the defined curriculum.

How can we commit to signing a GBA if we do not know all its terms or the exact fees we will have to pay?

The MoU is not legally binding (other than in some limited respects). Its purpose is to provide a clear reference point for all parties in terms of what is expected of them when and to provide strong moral leverage should a party not be performing, or be tempted to have a change of heart.

Does that mean we can just sign it and not worry about its contents?

The MoU is useful for the reasons mentioned. Although it may not be enforceable and scope to change its terms will be limited, it is still valuable to engage with it as a means of establishing where the difficult issues for your school are likely to arise; whether you have the resource to meet the proposed programme; and whether you are going to have built for you the best you can get for what you can afford.

How you engage with the MoU will potentially set the tone for your engagement throughout the project and (as doubtless your pupils have been told) what you get out of it will be closely affected by what you put in.

So when will we be expected to sign?

All schools in a batch need to have signed MoUs before the Outline Business Case for the batch is submitted for approval. This approval, in turn, triggers the commencement of the procurement process.

As you will need to understand in detail the position in relation to the issues touched upon in this article before signing the MoU, schools that expect to be entering the PSBP programme this year will do well to be looking at the MoU and thinking about those issues now.