The ANAO Report on the BER: Fact meets the Narrative

There’s a line at the end of the great western, The Man Who Shot Liberty Valance, where a newspaper editor has just learned that the story everyone believed of the shooting of the bandit, Liberty Valance, was in fact a lie. He turns to his reporter and says, “When the Legend becomes fact, print the legend”. In Australian political reporting, the line has become, when the narrative is contradicted by fact, print the narrative.

You see the narrative according to the media is that the stimulus spending under the Building the Education Revolution has been full of rorting, and lacking in value for money. Today an Auditor General’s report (all 201 pages of it) into the BER (known in the report as BERP21) came out and found that err, actually the stimulus spend on schools was run quite well.

Whoops.

Does the media read the report and report the findings in the full context of the report? Hell no, instead it scours the report looking for any sign of negativity that they can then blow up out of context (and often contrary to the meaning given in the report), and then go with brain dead headlines like:

Audit slams Rudd's primary school building program

I’ll give my view of the ANAO (Australian National Audit Office) report in a bit, but first let’s hear from two people who seem to be able to understand the report (most likely because in their other lives they read a lot of them). Both are from Crikey. First up Bernard Keane (it was in today’s email – he is a must read if you want decent analysis – he may not get scoops, but he can cut through the bull on a report better than just about anyone this side of Laura Tingle):

The extended and systematic campaign run by the right-wing media to smear the education component of the Government's stimulus package came a cropper this morning -- badly. The ANAO released its report on the primary schools component of the program and found... a successful and well-implemented program.

This is the program that The Australian has been attacking for twelve months as a scandalous waste of money. The conclusions of the ANAO's performance review -- when the auditors look at a program from top to bottom to see whether it has done what it was intended to do -- fundamentally discredit a campaign that has formed a key part of News Ltd's war on the Government.

The other is Possum, whose article on the report is an absolute must read (in fact if you haven’t read it yet, stop reading this and click on the link!)

The opposition of course doesn't bother reading the report anymore than does 95% of the media, and so you had dopey comments from Tony Abbott saying a judicial inquiry needed to be held – I wonder if any in the press gallery thought to ask him why given the ANAO report makes absolutely no mention of anything suspicious or illegal or even improper occurring. Then there is Chris Pyne (ah bless him), saying this:

“Julia Gillard used to claim that this had created tens of thousands of jobs,” he said. “The Auditor-General specifically finds today that there is no data that would provide any basis for that claim.”

The only problem with that is Pyne is relying on a sentence in the summary which notes that DEEWR’s (the Department) data didn’t really stand up to full economic scrutiny, mostly because it wasn't meant to, as the report states:

The responsibility for monitoring and reporting performance under the Nation Building and Jobs Plan is shared at the Commonwealth level by the Treasury, the Coordinator‐General and DEEWR. The Treasury has responsibility for modelling and reporting on the economic effect of the plan, as well as other stimulus measures.

Yes, it was Treasury’s job to do the modelling and reporting on the economic effects. And guess what, they have been reporting on it – most recently at the February Estimates Hearings. They’ll do it again at the end of this month’s Budget Estimates hearings. 

But that doesn't mean the ANAO didn’t look to see if it had provided any stimulus. In fact in the actual report (ie not just the summary) there is this nice little section:

Stimulus effects—progress to date

In it we find this:

7.16 A key leading indicator measured by the Australian Bureau of Statistics, that of the value of building approvals, shows that education sector spending (almost wholly attributable to the BER program) has contributed to a reversal in the sharp decline in non‐residential construction activity which commenced in July 2008.

7.17 The effect of BER P21 is also evident in Construction Forecasting Council data, which shows that the program is likely to partly offset the sharp decline in non‐residential building activity which commenced in 2008–09, and is expected to continue until 2011–12 (see Figure 7.6)

Have a look at this graph. I don’t think you need a degree in Economics to see that building activity in every sector except the education sector went massively downhill on the back of the Global Financial Crisis.

Maybe the jobs in the education sector weren’t real, maybe all that activity was just being done by guys working smarter and harder. And maybe Chris Pyne is a dolt who cant read a graph. I’m just not sure….

Then we come to the issue of value for money. The Australian especially has been full of stories of some schools complaining that they haven’t got value for money – that there wasn’t enough consultation and therefore they ended up with buildings they didn’t want or need.

The ANAO report pretty much gave the Government a tick on this – but that didn’t fit the narrative, so instead we have The Australian reporting:

BER audit finds problem but 'value for money' of individual projects outside scope

Hmm let’s look more closely at that. Firstly the Report stated:

The responsibility for achieving value‐for‐money for building works under BER P21 is, however, the responsibility of the Education Authorities having regard to the program guidelines.

So firstly it’s up to the state education authorities to get value for money, not the Federal Government, because it was the state education authorities who were in the end deciding what to build and where (the Fed Govt was proving the money). And yes the Report does state:

an examination of particular BER P21 projects was outside the scope of the audit,

So yes The Australian is technically correct, except that was only part of the sentence. Let’s see all of it:

7.20 While an examination of particular BER P21 projects was outside the scope of the audit, there are some broad program features that have influenced stakeholder views regarding the achievement of value‐for‐money that were considered by the audit. An important feature has been the speed with which the program had to be delivered. Drawing on the results of its survey of primary school principals, the ANAO considered the effects of:
• constrained consultation periods
• decision‐making processes; and
• the use of template designs.

So while it was outside the scope, the ANAO still did look into the value for money question. And how did it do this? It asked the principals (those very same whom The Australian likes to cite are so annoyed with the projects)

It found that on the consultation aspect, the principals did wish there was more time to do it:

 

 

 

 

 

 

 

This is not surprising – there was a Global Financial Crisis going on, so things were rushed, and people always would prefer more time to discuss major projects if they could. But then the ANAO asked if this time still allowed for a consensus with the school community to be reached on what to build:

Seventy three percent said it did and only just over 10% disagreed with the statement that there was enough time.

On the issue of decision making process and value for money, it was found that principals were more likely to believe their project would be value for money when the school itself commissioned the design of the build, rather than the education authority (not surprising really).

But on this point the ANAO came out with a startling point that should send a shiver up the spine of those in the media who have been basing their articles on the views of members of school councils or P&C groups:

7.28 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.[220]

The foot note 220 (as Possum also relates) is pretty cutting:

NSW Government Submission to the Senate Education, Employment and Workplace Relations Committee Inquiry into the ‘Primary Schools for the Twenty First Century’, p. 9. 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.

Whoops.

The ANAO concluded:

7.29 The ANAO observed on the basis of consultations with 14 Education Authorities, that achievement of value‐for‐money, through procurement and contract management activity, is a major area of focus of program managers.

The ANAO also then asked the principals what it thought of the projects:

7.33 The ANAO’s survey results reflect strong support for the program, and confidence in its outcomes. 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 (see Figure 7.11).

Yes, 95% were confident that the money spent on buildings in their school would provide an improvement to the school and would be of ongoing value to the school and the school community.

Just ask yourself when you ever heard of 95% of any group of people approving something the Government had done?

Here’s the final point made in the whole report:

7.36 Overall, there are some positive early indicators that the program is making progress toward achieving its intended outcomes, despite the slower than expected implementation of the program. Lead economic indicators, including construction approvals, indicate that the introduction of BER P21 has contributed to a reversal in the decline in non‐residential construction activity that resulted from the global financial crisis. Education industry stakeholders, including peak bodies, Education Authorities and a substantial majority of school principals have also been positive about the improvement in primary school facilities that will result from the program.

And yet Abbott, and many of the media thinks this is a fail.

The Opposition I can understand, but why is the media reporting it like this? Perhaps the answer can be found in something Shaun Carney, of The Age, wrote, back in March about Rudd which caught the eye of a few bloggers, but went without comment elsewhere. He wrote:

Rudd is a far-from-engaging speaker compared with Abbott. He lives off his notes and is not much liked by reporters.

Just imagine the outrage from Andrew Bolt type had he written that line about Abbott. But by contrast this is what he wrote of Abbott:

Abbott is a political professional, is liked by a lot of reporters because of his knockabout style, and he can throw together a speech while on his feet.

Well I have to say to those in the Canberra Press Gallery, it’s time you woke up and realised Abbott is playing you for chumps. In a speech last night on asylum seekers Abbott said:

''If global conditions worsened, millions might be at least tempted to swap their current existence for the opportunities of a new life in Australia if they thought the perils of the boat trip would win them permanent residency.''

Yes, millions. Had Rudd said this in 2007, he would have been bashed from pillar to post by the media, and there would be serious doubts as to his credibility. Such a dumb statement is almost par for the course for Barnaby Joyce, but for a prospective Prime Minister?

It’s time for the press gallery to get serious about Abbott, and throw off the “oh that’s Tony” attitude.

But then perhaps another reason for this lax attitude to Abbott that can be found in the tweet by SBS reporter Karen Middleton after hearing of the 49-51 Newspoll:

Tomorrow's Newspoll 51-49 to the coalition. Lordy. It's a contest, then. Journalists love a contest.