What MAT finance chiefs need to know after the RAAC school concrete crisis

The true costs of the concrete crisis that hit UK schools ahead of the 2023 autumn term might not be known for a long time. 

It’s not just about the price of rebuilding buildings that contain RAAC (reinforced autoclaved aerated concrete). The cost in lost student time and learning is large but difficult to estimate. 

Even those schools which escaped this crisis will need to be aware of the issues it has brought to light. It was already well known that the UK’s schools estate is far from being in acceptable condition. And when the government recently sent qualified capital advisers into 70 academy trusts, those advisers found four out of five did not have sufficient data on the condition of their buildings.  

Blog - What MAT finance chiefs need to know after the RAAC school concrete crisis

How RAAC (reinforced autoclaved aerated concrete) became a crisis for schools  

RAAC was used as a lighter and cheaper alternative to traditional concrete from the 1950s. 

But research in the 1990s started to raise concerns about the use of it in buildings. In 1996, the Building Research Establishment found excessive cracking and corrosion in roof planks that had been designed before 1980, although it did not find a safety hazard to users of those buildings. 

Concerns became more urgent in August 2022, when the UK Government Property Agency concluded that RAAC was “life expired and liable to collapse with little or no notice”. 

Despite this history, the Department for Education delivered a shock to the whole school system by announcing in August 2023 that buildings containing RAAC would have to be closed. Education Secretary Gillian Keegan criticised schools which had not completed surveys about RAAC in March 2022. 

The government has pledged to pay for the repair work generated by its order to close buildings. But the state of school infrastructure remains a serious concern. 

The DfE has admitted that repairing or replacing all defects in England’s schools will cost £11.4bn, almost double a previous estimate. 

The qualified capital advisers sent into 70 academy trusts recently found most of them did not have enough data on the condition of their buildings. They also lacked  asset management plans and estate strategies. However, 12 trusts which received the visits benefited to the tune of £600,000 between them by implementing the advisers’ recommendations. 

The challenge schools need to face after the RAAC crisis 

RAAC had an intended lifespan of just 30 years – and as we’ve seen, its presence in public buildings had been causing concern since the 1990s.  

So the fact that the concrete crisis came out of the blue, days before a new school year was due to start, left schools and parents exasperated. 

Schools affected by RAAC will need to carefully manage the spending of money awarded through the government’s School Rebuilding Project – and make sure it really covers the rebuild. 

But the episode contains some lessons for all schools and their finance heads, whether or not they were caught up in this particular problem: 

  • The challenges are much bigger than RAAC. Whatever the final bill for the concrete crisis turns out to be, the DfE has been warned it will take £11.4bn to get England’s schools into good condition. The National Audit Office has said 24,000 school buildings – around 38% of the DfE estate – are “beyond their estimated initial design life”. 
  • There’s been a history of underinvestment. The Institute for Government has found DfE capital budgets fell by more than a third between 2007-08 and 2020-21. That suggests schools are going to have to stay on top of the condition of their assets and be focused on raising capital where they can. 
  • Asset management will need to improve. With evidence that most MATs don’t know enough about the condition of their buildings, it will be essential to prioritise better monitoring of infrastructure – and initial findings suggest this will be financially better for schools.

Key lessons for MAT finance leaders from the concrete crisis   

Finance leaders will need to address some immediate challenges from the RAAC crisis: 

  • Schools will need the highest quality financial management. This will ensure they are properly tracking the costs of the crisis – and not dipping into the reserves. The government has pledged the money to put the situation right, but miscalculations could lead to costs falling on school budgets and affecting education.
  • Tracking revenue spending will be important too. The government has pledged that schools won’t end up out of pocket and says it will reimburse them for the revenue costs of dealing with the crisis, as well as for the rebuilding itself. Having a finance system that allows you to easily track and report on the revenue spending that belongs under this heading will be important if schools are not to end up out of pocket.  
  • Schools will have to be good at project management. For those who are carrying out rebuilding, it will be essential to run the projects professionally, ensuring costs are tightly controlled and work is done to budget and schedule.
  • Reporting will be all-important. The government will expect schools to be accountable for money awarded under the School Rebuilding Project. It’s essential to be able to satisfy the DfE about how and where the funding has been spent, in line with the lengthy terms and conditions attached to all government money. A finance system that allows you as many dimensions as you need, so you can tag and track spending on projects, will help a great deal.  
  • Schools need to get on top of the asset management. If your school or trust is in the majority that don’t currently have a good grasp of the state of their buildings, it will be important to up your game. A good system should include a proper asset register and plan which is integrated with the finance system. It should track the state of repair of fixed assets, including buildings, and apply depreciation in the most appropriate way.  
  • Finance systems will need to speak to other systems. Increasingly, finance leaders will need ways to view information about other assets. Accounting systems that store non-finance information alongside the relevant entries in the balance sheet will be a big help. 

Tackling the backlog  

The RAAC crisis has been a shock to schools at a time when they already had plenty of challenges to contend with. 

Although the government has pledged to meet the full bill for putting things right, plenty of people in education will be sceptical. With schools already struggling to balance the books, there will be suspicions that the cost of this emergency will surely be felt on education budgets at some point.  

The episode has been a reminder that pupils are being taught in substandard school buildings up and down the country. School leaders and finance teams will need to be confident managers of money, assets and projects as they face up to the challenge of handling the backlog.  

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