- Much of the fuss about alleged wastage in the Building the Education Revolution scheme comes from so-called “whistleblower” Craig Mayne. LP reader JohnL contributes this extensive analysis of Mayne’s claims and expertise. We have posted JohnL’s analysis in its entirety. John has also written a shorter introduction as a separate post: to unify discussion I have closed comments on this post and request that discussion occur there –Robert Merkel
The media describe Queenslander Craig Mayne, who claims that “billions of dollars” are being wasted by Federal and State Governments on the Building the Education Revolution (BER), as a “whistleblower”.
But if “whistleblower” indicates someone with inside knowledge about a particular field releasing accurate information, then Mayne does not deserve the title. His credentials to be called an expert analyst are shaky and his experience in the construction industry is minimal – in fact when appearing at a Senate inquiry he was finally forced to admit he has not been employed in that industry in any capacity since before 1986. (1)
That did not stop him suggesting to Education Queensland around February 2009 that he “would be willing to come and work for them for free and be paid on a percentage of what I could save them, ” according to a letter he tabled at the Senate Committee inquiry into the Primary Schools for the 21st Century (P21). At the time Mayne was P&C President of the Holland Park State School, which is in Kevin Rudd’s electorate of Griffith.
On 10 March 2009, in a letter “Re: Building the Education Revolution” (BER) to the Senate President, Queensland’s ALP Senator John Hogg, Mayne wrote: “It troubles me deeply at how they (Education Queensland) will manage almost 5 billion dollars of Federal Funds.” (2)
Not even half right
Mayne is not even half right about how much Education Queensland will manage of Federal BER funds. The kindest thing one could say about this estimate is that he either did not know, or ignored, the fact that Catholic and Independent schools manage their own BER Funds through Block Grant Authorities (BGAs).
The biggest element of BER funding is the P21 segment and the Queensland total for this at October 2009 (that’s after the funding was increased in August 2009) was $1,789,000,259. (3). With its estimated $450 million share of the revised $2.12 billion national funding for projects under the Science and Language Centres for 21st Century Secondary Schools (SLC) and the National School Pride (NSP) program, Education Queensland would manage about $2.24 billion of Federal BER funds. Mayne was eventually out by $2.76 billion (at least $2.8 billion originally) on what he claimed Education Queensland would manage.
Mayne’s own comments show he was smarting at the legitimate refusal of the Senate President to take him seriously. His April 2010 submission to the Senate inquiry said in a section called “Raising Concerns” that the only response to his letter to Senator Hogg was an e-mail saying: “Thanks Craig”. Mayne also mentions that he rang the office of Prime Minister Kevin Rudd in February 2009 “to raise the alarm on what would happen if the program wasn’t tightly controlled”.
Mayne said that after this (apparently between March 2009 and April 2010) he met and/or wrote to federal politicians, state politicians as well as state and federal bureaucrats “raising the alarm”. Besides Rudd and Senator Hogg, he lists 24 names, 15 of whom he said he met one-on-one. (4)
Limited contact with schools
Well, in that 13 months Mayne in his own words had “limited contact with other schools”. During his evidence to the Senate inquiry on 19 May this year, Senator Sarah Hanson-Young (Greens, SA) asks: “Have you been working or in consultation with people from other schools who are frustrated in terms of this?” and Mayne replies: “I have had limited contact with other schools.” (1).
In his “Conclusion” of his April 2010 submission to the Senate inquiry Mayne said he “would expect even at this stage of the process several billion dollars could be saved from the program by having true independent analysis of the BER program”. (4).
What Mayne was effectively saying is that $2 billion of the $9,508,054,501 allocated to 7497 Government school projects under the P21 project could be saved. (3). He does not include the BGAS for Catholic and Independent Schools in his criticisms.
A slight digression. Using the national figures in Table 5 of the Department of Education, Employment and Workplace relations (DEEWR) submission to the Senate inquiry, the projected average for the 7497 Government school projects is $1, 268, 248, compared to a $1,310,337 average for the 2102 Catholic school projects and $1,448,178 for the 1098 Independent school projects (all to the nearest dollar).
The projected average cost for each Catholic school P21 project is $42,089 (3.3 per cent) higher than the average Government P21 project and the average cost for each Independent school project is $179,930 (14.2 per cent) higher than the average cost for a Government school project.
Even allowing for the fact that there are more small Government primary schools than Catholic and Independent schools, which would affect the average because small schools get lower funding and less expensive projects, these differences in average project costs would not indicate much waste in Government school projects. And, as I will show later, the Queensland State schools do even better on a comparison basis for average project costs.
But, it’s instructive to examine claims such as those made by Mayne from all angles. If $2 billion is wasted on the Government school projects, then according to him all the 7497 Australian projects should cost is $7,508, 054,501, or an average of $1,001,475 per project. This would make the average Catholic P21 project $308,862 (30.8 per cent) higher than the revised average Government school P21 project and the average Independent school P21 project $446,703 (44.6 per cent) higher than the revised average Government school P21 project.
Shonky evidence:
On the first page of his April 2010 submission to the Senate inquiry Mayne claims an extract from Queensland’s Department of Public Works procurement plan as evidence disproving State and Federal Governments claims that “waste of billions of taxpayer dollars” is not happening. (4). He repeats a section of this quote in his evidence to the Senate inquiry on 19 May.
The quote Mayne uses comes from page seven in the third section of the report, which quite properly is discussing “The Procurement Risks” before going on in the fourth section to discuss “The Procurement Approach” and in the fifth section to ask “Have the risks been addressed?” (5).
Mayne did not quote in either his submission or his evidence paragraph 5.2 of the procurement plan on page 23, which deals with the question of whether the risks have been addressed from a BER perspective. Paragraph 5.2 says: “By adopting a range of delivery systems, some with greater cost efficiency, the procurement model for BER addresses all risks. The performance based system gives DET (Queensland’s Department of Education and Training, or Education Queensland) significant control over time, cost and quality outcomes.”
Taking a statement out of context and claiming it is evidence of the “waste of billions of taxpayer dollars” illustrates how much reliance can be placed on Mayne’s submission.
False claim about no tenders
Mayne’s claim in the Introduction to his submission “Over 1.7 billion dollars in work has been allocated to builders without tender” is false. The Queensland Department of Works Procurement Plan (5), quoted out of context earlier by Mayne, says on page 22: “Through the use of benchmarking, a contract model that has a fixed cost outcome with a sensible allocation of risk and a market feedback loop via open tendering (emphasis added), the BER procurement model includes sufficient mechanisms to deliver value-for-money.” Mayne either did not read this far or ignores material that contradict his assertions.
On this same subject, Mayne tells Senator Brett Mason (Lib, Qld) during his evidence on 19 May 2010 that it is correct to say none of the three rounds of BER projects in Queensland (of which Education Queensland manages nearly $1.79 billion) have been put to tender. (1).
Later that day, Graham John Atkins, Acting Deputy Director-General, Department of Education and Training, Queensland, tells Senator Mason: “At present we have resisted publishing the actual tender (emphasis added) results because we are still going through the tender process on projects and we do not want to interfere with the market.” (1).
Julie Grantham, Director-General, Department of Education and Training, Queensland, in response to Senator Gavin Marshall (ALP, Vic) asking about the history of building projects at Holland Park State School and Hendra State School (the latter talked about in some detail by Mayne) replied: “Can I say that both of these projects are currently out to tender and those tenders have not closed, although their closure is imminent.” (1).
Asked if there had been any complaints from the Holland Park State School principal or the parents’ committee about the project there, Atkins replies: “No, the principal is very happy. There has been a complaint raised by Mr Mayne, which we referred to PwC (PricewaterhouseCoopers) who we asked to independently investigate all complaints or allegations of issues.”
Atkins and Grantham say the principal has written to signal “that they are very pleased with the project and its progress, and the current P&C have also endorsed this position.” Atkins quotes from recent correspondence from the Holland Park principal: “I, my staff, the P&C and indeed the great majority of parents in the community remain delighted at this once in a lifetime opportunity.” (1).
Schools not the same as homes: During Mayne’s evidence to the inquiry, the chair – Senator Michaelia Cash (Lib. WA) – notes he has provided an analysis of projected costs for Hendra State school allocated under BER and then a comparative commercial value. (1). Mayne shows $850,000 versus $200,000 and Senator Cash asks him to take the inquiry through why this is a realistic comparison.
Mayne’s answer defies belief. He says: “I contacted Dixon Homes, which is a respected home builder in Queensland. The type of construction that we are talking about is an apples to apples comparison. It is a concrete slab, timber framework, colorbond roof and away you go. It is not complicated technology. To build a building of the same size, but including two toilets, two kitchens, two laundries, solar hot water, solar voltaic cells on the roof, et cetera, the Dixon Homes cost were $194,000 – drive-away price.”(1) Presumably, this is how he would have saved Education Queensland money – sub-contracting out to Dixon Homes and pocketing a percentage of the savings!
It did not take long for Mayne’s use of Dixon Homes to be shot down. Later that same day, Julie Grantham, Director-General, Department of Education and Training, Queensland, tells deputy chair, Senator Gavin Marshall (ALP, Vic), that the complaint received about Hendra State School centred around some early documentation and some indication that a commercial, domestic style of delivery would give greater value for money for Hendra. She continued: “So we have spent some time with Hendra’s P&C, the school community and principal to explain that this sort of infrastructure is not done along the lines of domestic construction. I think we are making headway.” (1)
Graham Atkins, Acting Deputy Director-General, Department of Education and Training, Queensland, chimes in to add: “I think it is important to add in support of that the Department of Education and Training over the years has developed a very comprehensive set of design guidelines and design standards, wherein we have almost a performance specification for material selections and construction techniques. We have used those same standards for the BER rollout. The reason for that is that they address things such as lifestyle costing, environmental issues and future maintenance needs. So they limit our ongoing liability. They are much more stringent than domestic construction, but so is commercial construction in every sphere.” (1).
Figures just don’t add up:
Mayne seems to have difficulty using a calculator. In 4.0 of his submission (4), Mayne says: “The State (Queensland) acknowledges that Rounds 2 and 3 worth $1,158, 789,081….” This is a reference to his claim in 3.0 of actual figures for Rounds 1, 2 and 3 relating to when actual school projects are to be approved. The totals he gives in 3.0 are $602,700,043 across 481 projects for Round 2 and $511,000,034 for Round 3 across 540 projects. Well, these two sums add up to $1,113,700,077, a discrepancy of $45,089,004 which he does not attempt to explain.
In trying to make sense of this error, I note that in Appendix B headed “Round by Round Comparison” Mayne refers to $43,750,004 from Round 1 being carried over to Round 2, something he did not mention in 3.0 or 4.0. But, even if this is the explanation, he still has an error of $1,339,000 in his calculations.
In Appendix B Mayne also works out there have been 1662 projects approved in Queensland to a total value of $1,787,900,259, which somehow he calculates is an average project cost of $1,083,703 (to the nearest dollar). Well my calculator works it out at $1,075,752 (to the nearest dollar). Hey, what’s a mere $7951 error in average project costs? Well, multiplied by the 1662 projects it would amount to $13,214,562.
The point is that Mayne is careless with figures. Anyone who wants their calculations to be taken seriously should surely take some care and effort to ensure that they add up, particularly when putting them to a Parliamentary inquiry.
Average costs lower for Qld State schools:
As shown Mayne’s Appendix B gives an incorrect average project cost for Queensland State schools. He does not attempt an average project cost for Queensland Catholic and Independent schools, although the figures enabling this were easily accessible in the DEEWR submission of October 2009. Using the DEEWR figures for each (because for State schools they are almost the same as in Mayne’s Appendix B and because they allow like-to-like comparisons with Catholic and Independent schools in Queensland) reveals the following:
- Government schools: 1660 projects with $1,789,000,259 funding at average cost of $1,077,711 (to nearest dollar) per project.
- Catholic schools 359 projects with $495,940,935 funding at average cost of $1,381,451 per project.
- Independent schools 217 projects with $334,701,725 funding at average cost of $1,542,404 per project.
The average project cost for Catholic schools is $303,740 (28.2 per cent) above the Government school average and for Independent schools is $464,693 (43.1 per cent) above the Government school average.
Backtracking on collusion allegations:
Mayne makes a number of allegations in his submission about “serious questions of probity” under headings “Relationships with managing contractors”, “Potential price collusion – Managing Contractors” and “Principals Representatives and IPO fees”. (4)
If Mayne had read and/or understood Section 4.1.1 P21 section (5 – pages 15-19) of the Procurement Plan, he could not have made such sweeping allegations against managing contractors.
By the time he is giving evidence on 19 May, he apparently realises that he is on dangerous ground with these allegations. Senator Brett Mason (Liberal, Qld) says to him: “So what you are telling us is that effectively you have eight managing contractors, operating as a sort of cartel, setting a price” to which Mayne replies: “I could not possibly make that assertion that they are operating as a cartel. I think there are serious questions to be answered in respect of that.” (1).
When Senator Gavin Marshall (ALP, Vic) asks: “You talked earlier about it being a con to suggest that any accusations of wrongdoing could be referred to the appropriate authorities. That is what you you said, isn’t it?”, Mayne replies: “I am not a lawyer but that is my basic understanding of contract law.”
Senator Marshall: “You said you have not accused anybody of doing anything but, really, the tenor of your submission is that there has been collusion not only between builders but between builders and department officials and government officials.” Mayne: “No, that is not what I have said at all, Senator.” When pressed on this Mayne says “No, absolutely not.” (1)
No Qld school or P&C complained
A compelling indication of the worth of Mayne’s claims about Queensland can be gauged by the fact that when submissions for the Senate inquiry closed on 23 April 2010, after being open for some seven months, only 73 were received. (6). There were none from any Queensland school, none from any Queensland P&C, one from Mayne and one from Queensland Catholic Education which was favourable.
The73 submissions came from 9 State schools (the submission headed Hallam Valley Primary is actually from the School Council), 19 State school P&Cs or similar groups, 12 individuals, 2 marked confidential which could not be opened, 7 Catholic school organisations, 7 from Governments or Government Departments, 2 private schools, 6 teacher groups and unions and 9 I have classed as miscellaneous.
The breakdown of the 40 submissions for State schools, State school P&Cs, and individuals were:
- NSW: 2 schools (NSW has a total of 1784 Government primary schools receiving funding), 14 P&Cs, 6 individuals.
- Victoria: 5 schools (1253 Government primary schools receiving funding), 4 P&Cs, 3 individuals.
- Queensland: 0 schools (1080 Government primary schools receiving funding), 0 P&C, 1 individual.
- South Australia: 1 school (517 Government primary schools receiving funding), 0 P&C, 0 individual.
- Western Australia: 1 school (720 Government primary schools receiving funding), 1 P&C, 1 individual.
Note: One individual submission listed as “Name Withheld” did not have any material to identify its origin.
There were no responses from Tasmania with 168 Government primary schools receiving funding, ACT with 66 Government primary schools receiving funding and Northern Territory with 134 Government primary schools receiving funding.
For those interested in the overall picture 23 (31.5 per cent) of the 73 submissions were positive about the BER, including all 7 from Governments and/or Government Departments, 2 from primary schools, 2 from private schools, 1 individual, all 7 Catholic organisations, 3 of the 6 teacher groups and unions and 1 miscellaneous.
This left 50 (68.5 per cent) critical of the 73, comprising 7 from primary schools, 19 from P&Cs, 11 from individuals, 3 from teacher groups and unions, and 10 miscellaneous (which includes the 2 confidential submissions that could not be opened.)
Uncritical mainstream media coverage
The mystery is how the mainstream media could continue to treat Mayne as some sort of guru after his appearance at the Senate inquiry.
For example, Anne Connolly, of the ABC News Online Investigative Unit, wrote in a piece for ABC’s The Drum(7): “It’s worth pointing out that much of the financial analysis comparing standards with public school costs has been done by a dogged former P&C president and civil engineer from Queensland, Craig Mayne, who gathered publicly available data and pieced the puzzle together and all for The Australian’s benefit.”
In his evidence to the Senate inquiry 12 days before that article appeared Mayne confirmed he was not a civil engineer. (1) What we have here is a Walkley Award winning journalist getting a basic fact wrong.
Assigning Mayne a qualification he does not have and accepting uncritically his financial analysis is unjustified boosting.
Project manager claims demolished
In his evidence to the Senate inquiry Mayne squirms when questioned about his claimed experience as a project manager in the construction industry.
In reply to Senator Sarah Hanson-Young (Greens, SA), Mayne refers to “My experience of many, many years in the construction industry…” This later becomes having “worked in and around (emphasis added) the construction industry from 1979 through to 1995…”
When it is suggested to him that has never been a project manager in the building construction industry, Mayne says: “Not in the last few years, no. But I was.”
Asked for specific cases when he was project manager for buildings, Mayne replies: “They are so far back, I cannot think of specific cases. When I worked for the City of Glenorchy managing civil projects from the installation of sewerage systems, roadworks and a variety of other aspects. I worked for a company called PLFB Consulting Engineers in Tasmania. We looked after the Marine Board equipment depot on the waterfront of Hobart. On the Launceston General Hospital, Mersey General Hospital and the TAFE college projects. I was not the project manager, but I would go to site to look at progress and to converse with the project manager. They are major projects.” He agrees that all these were before 1986.
When it is suggested that he has not done any building construction management since then, Mayne replies: “Other than the projects at Holland Park, yes, that is correct.” When it is put to him that he was not project manager at Holland Park, Mayne answers: “Officially no.”
Asked when he worked for PLFB consulting engineers, Mayne says: “From memory, I think it was about 1985.” Asked if he were project managing construction sites, Mayne answers: “No, I mentioned previously that on those larger projects there would have been an onsite project manager.”
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