Last year, the newspapers wrote about leaked information from the Department for Education, where senior officials were reportedly bemoaning the crumbling condition of our state schools, noting “the deterioration of the school estate continues to be a risk… (with) some sites a risk to life, too many costly repairs rather than rebuilds, and rebuild demand (outstripping) supply”.
It is standard accounting practice that your accounts reflect the costs of your activity. Capital investment is lumpy, so those costs are spread across the life of an asset and labelled “depreciation”. Depreciation is a real cost and reflects the diminishing value and quality of your buildings and equipment.
Failure to recognise this deterioration stores up all sorts of problems, not always immediately obvious. For public services in particular this can be catastrophic or even, as the DfE officials noted, a “risk to life”.
