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Contractors set for crunch school talks

Major contractors are set to start crunch talks with education chiefs on Thursday in the hope of hammering out how £2.4 billion of schools building work will be procured.

The meeting with the Education Funding Agency comes as Construction News received the first indication that the Treasury could respond to its consultation on private finance initiative schemes by July.

CN understands the government aims to clarify how the new PFI model, or models, will look by the end of July when Parliament breaks for its summer recess.

The Department for Education revealed last week that 261 schools, from 587 applicants, will be either rebuilt or have their “condition needs met” under the Priority Schools Building Programme.

The government has found £400 million in efficiency savings from capital programmes, including the axed £55bn Building Schools for the Future fund, to kickstart the first 42 schools most in need.

Click on map to enlarge – story continues below

Schools awarded funding by region and by local authority

But it is not known whether the projects will be procured through existing frameworks or on the open market.

Contractors likely to be chasing the work include Balfour Beatty, Bam Construction, Carillion, Interserve, Kier, Laing O’Rourke, Morgan Sindall, Sir Robert McAlpine, Skanska, Wates and Willmott Dixon.

If the first 42 schools are procured through the existing academies framework, this would mean that firms including Laing O’Rourke, Miller and Skanska would not have access to the work.

The academies framework is split into two: one covering the North and Midlands, the other covering the rest of the country.

One director at a leading contractor said: “These are the questions we will be asking [at the meeting].

“If some of [the schemes] are through the academies frameworks, we are not on it, so we would not be able to go after them.”

His understanding was that the first wave of Priority Schools work would be based on design-and-build contracts, procured on the open market.

“The remainder we are hoping will still be PFI,” he added.

The first wave of 42 schools is 27-15 in favour of the North and Midlands, meaning contractors on the second academies framework such as Apollo, Leadbitter and Rydon could face a significant fight to secure work.

Six schools in Coventry have been selected among the first 42, but a spokeswoman from Coventry City Council said that while the council was delighted with the funding, it had yet to hear from the EFA about how it will procure the work.

The council had been three weeks away from closing dialogue with bidders to deliver the city’s BSF scheme when Mr Gove scrapped the £55bn programme.

Cabinet member for education, Cllr David Kershaw said: ” These seven schools are in urgent need of replacement so I am relieved that they have been chosen to receive funding. Losing BSF funding was a big blow to Coventry as many schools are still missing out on vital modernisation. 

“We were determined that something positive should come out of the disappointment and I’m glad that our fight including delegations to speak to ministers with the 3 Coventry MPs has paid off in securing this new funding. I hope that the government will continue to work to find other ways to help local authorities to provide all the new school buildings they need and deserve.”

News that there could be some clarity over PFI in July was welcomed by contractors, who are also seeking information on the cost parameters and quality requirements of programmes.

Wates group investments director Steve Beechey said: “We are still optimistic that we are going to get the OJEUs [tenders] for the PFI schools in September.

“I think we would have said up until a couple of months ago they will drag it out - but I have noticed the shift and I think it’s partly to do with the figures that have put us back into recession.”

One director said that he had been planning for a PFI announcement in September, with the government needing more time to “bed down” the procurement documents.

“The big question is how much further forward are we on the others [not the 42] - hopefully the meeting will provide us with the answers everybody is looking for,” he added.

EC Harris head of education Simon Lucas said: “One thing to do is start counting back from the 2015 election. If they are going to be delivering schools by then [the EFA] needs to sort out this programme by autumn.

“There is a lot of talk about driving costs down and they clearly want to get the £/sq m down to the lowest cost but there comes a point when you get so low, that you have to spend an enormous amount maintaining schools – the value of the operating cost is crucial. It would not be good if they needed to start spending money in the next government term to fix problems.

“A lot will depend on the industry itself and what efficiencies it can demonstrate through the first batch of schools.”

CN understands the £400m savings are likely to represent the last major funding announcement based on efficiencies found from the BSF programme.

Some schools ‘left in the dark’

Some local authorities that missed out on the funding have hit out at the allocations process after 326 schools failed to make it onto the priority list.

Wandsworth Council education spokeswoman Cllr Sheila Boswell said that, while one school in the borough had benefited from the fund, others were left “in conditions barely adequate to teach in”.

But the process was defended by EC Harris head of education Simon Lucas, one of three technical advisers to Partnerships for Schools that carried out an assessment of the applications.

Mr Lucas acknowledged it was likely some schools would be considering how to challenge the verdict but insisted the criteria had been clear. “Great care was taken” to ensure consistency, he said.


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