Who Says BER Funding Is A Rort?

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If you’ve glanced at the front page of The Australian recently, you won’t have missed the vicious campaign being conducted by News Limited against the Rudd Government’s schools stimulus spending.

For months now, The Australian has been relentlessly attacking Julia Gillard’s school infrastructure investment on the grounds of waste and mismanagement. "School BER costs double quoted price," the headlines screamed in March; similar stories have been filling the pages of the national daily ever since.

The Australian has thrown considerable resources at this story. But, despite uncovering a number of isolated examples of costly or wasteful school buildings — like the now notorious school canteens in New South Wales that The Australian trumpeted were "too small for a pie warmer" — News Limited has largely failed to find any widespread mismanagement or cost over-runs in the schools stimulus program.

It’s worth dwelling on the pie-warmer headline for a moment. Pie-warmers are small. I bought a pie-warmer a few years ago at a commercial kitchen clearance house for a couple of hundred dollars that would comfortably fit on a small bench-top. The canteen in question is not huge at 24 square metres but plenty of cafes run sophisticated food operations with less space. Maybe it’s just retail politics, but does it strike you as a little absurd that our only national daily newspaper is assessing a $16 billion economic stimulus program on the basis of pie-warmer space in a school canteen?

To get to the broader facts about the success or failure of the schools building program, you would need to move past the pie-warmer stories and conduct an in-depth all-of-government investigation.

And that’s just what the Auditor-General has done. The Australian National Audit Office’s in-depth investigation into the BER stimulus program took several months and resulted in a 202 page report (pdf).

This report emphatically cleared Julia Gillard and her department. While the Audit Office report did find some significant flaws in the design and implementation of the program — most notably, the rushed run-out of the stimulus, and the under-funding of the program to the tune of more than $1 billion — on the issues of cost over-runs, waste and mismanagement, it is unequivocal in its assessment that the schools program has delivered good value for money.

Primary school principals agree. The Australian Primary Principals Association surveyed more than 2400 principals about their experience of the stimulus program. According to their findings (pdf), "95.8 per cent of principals across the three sectors [public, independent and Catholic schools] agreed that work conducted … was going to benefit students."

The Audit Office also surveyed school principals. It found "over 95 per cent of principals were confident the BER program would provide their school with an improvement of ongoing value to their school and school community, while over 80 per cent of principals were confident the program would achieve its education and
community benefit outcome."

How did the media report on this ringing endorsement? The Sydney Morning Herald‘s headline on 5 May read, "Audit slams Rudd’s primary school building program", while The Australian‘s Joe Kelly, in an unbalanced piece that glossed over the broadly positive findings, wrote that the audit "has identified major difficulties". The ABC, as it seems to have been doing for much of this year, picked up on the News Limited party line. It ran a number of negative stories that cherry-picked the survey data, but ignored the audit’s broader conclusions, like this one from the ABC’s so-called "online investigative unit". The article contained no investigation at all, merely the selective quotation of the audit itself.

In fact, so unbalanced is the media coverage of the schools building program, if you simply followed the bulk of the reporting about it, you’d be forgiven for thinking the schools building program has been a giant rort. You wouldn’t know that, out in the real world, the vast majority of school principals are happy with the investment.

And what did the audit actually say about the costliness and value for money of the program? The key section is section 7.28, which to my knowledge only Crikey‘s Possum has so far quoted:

"In many cases, concerns from principals and community members about value-for-money relate to a misunderstanding of the building standards Education Authorities are expected to adhere to in building education infrastructure. This was pointed out, for example, by the NSW Department of Education in its submission to the Senate Education, Employment and Workplace Relations Committee Inquiry into BER P21:

"It should be noted that local quotes are often found to be competitive with those obtained through the Managing Contractors’ tender processes. However, there have been instances where local quotes have been presented to the BER Program Office which at first glance appear far less costly than their estimates, but which on further examination did not represent value for money in terms of quality of the product required to meet the Schools’ Facilities Standards."

There’s an interesting footnote to the Audit Office report here which reads: "The department also noted: At Epping North Public School for example, a parent and builder on the [parents’ and citizens’ committee] indicated he could complete the building works cheaper than the managing contractor’s estimated price for a hall, [covered outdoor learning area]and canteen. The BER [integrated program office]arranged for the managing contractor to include this builder in the tender process. His quote was the most expensive option at well over $3 million for the project — or 50 per cent higher than his original claim."

We didn’t hear about that story in The Australian, or for that matter from the ABC’s "online investigative unit". Could it be because it didn’t fit with the dominant angle the media has been running about the schools stimulus spending?

In fact, it’s simply not meaningful to compare many of a school’s building costs with commercial fit-outs or the much-touted Rawlinsons‘ handbook in the way the media has been. State government education departments have much higher building standards when it comes to things like quality of build and environmental sustainability. As the Audit Office report states in a footnote on page 146, the Victorian Education Department, which manages $5.6 billion worth of education infrastructure measuring 7.6 million square metres, "is guided by its own environmental sustainability strategy and building quality standards handbook".

And yet, despite the findings of the Auditor-General, The Australian and other sections of the media continue to run the line that the schools building program has been a waste of money.

Media distortion matters. Citizens rely on fair and balanced reporting from media outlets in order to make democratic decisions.

More importantly, campaigns like this one lend weight to particular world-views about the role and usefulness of government. If Australian voters are failing to give the Rudd Government credit for Australia’s rosy economic prospects, perhaps it is because the Australian media has consistently failed to understand the value and importance of the Rudd Government’s Keynesian stimulus. Stories about "troubled" programs like the BER schools infrastructure feed into this misconception. The result is that future government may be less likely to spend the public money required the next time a recession beckons.

Ben Eltham

Ben Eltham is New Matilda's National Affairs Correspondent.

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