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Concerns for BSF procurement route

Senior construction figures have revealed fears for the procurement and delivery model at the heart of the £55 billion Building Schools for the Future programme.

Balfour Beatty group managing director Mike Peasland and Carillion education director Rob Holt are among those voicing concerns over the future of the Local Education Partnership.

The LEP model sees a main contractor procured through OJEU to partner with a council and national delivery body Partnerships for Schools to transform an area’s secondary school estates.

But there are fears that its existence is under threat from promised public spending cuts and the attractiveness of other procurement routes, such as the £4bn academies framework.

Mr Peasland told Construction News: “A concern is that we could see the LEP ditched - the feeling is that if we get a Tory government then we would lose the LEP.

“They are going to cut back and if the scale of projects is cut back then what use is there for a LEP?”

He added: “We have spent two to three years getting the model to work effectively and if we abandon it now, we would lose the benefit that it could bring to the Primary Capital Programme and local authorities’ wider schemes.”

Meanwhile, Mr Holt said: “We are at a crossroads, but there is an imperative to keep the LEP model.

“It is actually delivering and we are creating jobs and training opportunities. It is interesting to see how we are going to go forward from here but we must keep the LEP.”

Another contractor source added: “In the market the view is that LEPs are under threat to save money for the local authorities, and that a lot more work is destined to fall onto the framework.

“The framework is faster and cheaper to procure without doubt, but it excludes the ICT and FM that is within BSF and the framework has very little legals negotiation.”

LEP procurement can be a lengthy and expensive process, and contractors have become wary of entering into it unless they are confident they are going to win.

The £130 million Bournemouth BSF project was last month switched from the LEP model to the academies framework after failing to attract enough interest for an OJEU-based competition.

Keeping the bidding battle to a mini-competition between up to 12 firms on the relevant section of the framework is expected to cut seven months off the process and save all parties substantial amounts of money.

However, major contractors would rather see larger projects use the partnering approach, which they believe can bring long-term benefits.

Interserve Project Services director Bob Vince said: “Single school or small grouped school procurements cannot match the time and cost savings of a LEP.

“In the next Parliament it will be even more important that we produce greater savings and deliver even quicker.

“The private sector is up for this but it won’t happen with delivery through smaller or one-off procurements for schools.”

Mr Peasland added: “If you have just a couple of schools then the framework can work but if you have a big programme then you need the LEP.

“The Hertfordshire BSF project is £1bn over 10 years. We need that kind of programme to take a view on investing real money.”

Shepherd Construction business development director Gary Edwards said of the academies scheme: “PfS has a
structured process with a standard template and a streamlined selection process.

“Anything that speeds the procurement process up has to be a good thing both for the industry and for the customers.”

But he added: “A lot depends on the scheme and the individual local authorities. There is a place for both the LEP and for academies. I think PFI will always be around as well.”

Constructing Excellence chief executive Don Ward said the LEP model had problems to overcome. “It is an expensive process, with lots of wasted design effort in the procurement stage. Frameworks have a natural advantage in some cases.”

But he added: “Collaborative working is vital, especially in the current market.”

A PfS spokeswoman said: “The delivery of schools capital programmes involves a range of procurement routes.

“For larger BSF schemes, LEPs have proved an efficient vehicle that not only deliver education investment but increasingly wider local investment too, including in health, leisure, housing and transport.

“For other BSF schemes and academies, the framework route has demonstrated its value in driving costs down to the tune of £1.5bn savings to the public purse.”