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PF2 'not suitable' for new £2bn priority schools

The second phase of the Priority School Building Programme is likely to be procured and delivered differently to the current £2.4bn scheme, according to the Education Funding Agency’s director of capital.

Schools minister David Laws has committed £2bn of the Department for Education’s 2015-21 £21bn capital budget to a second phase of the PSBP, the programme to rebuild the 261 schools in most urgent need of repair in England by 2017.

EFA director of capital Mike Green told Construction News PSBP2 would focus on repairing or replacing individual school buildings, rather than rebuilding whole schools.

“There’s variety in this programme because it doesn’t just do whole schools. We suspect a large part of this will be block solutions.

“Procurement in all probability won’t be identical to the way we did [PSBP]… Whether we batch them, or let them out one at a time, or whether we do a mixture. We have some things to sort out,” he added.

Capital batches of priority schools are currently procured through the EFA’s national Contractors’ Framework of 10 firms, however Mr Green said there may also be a role for the EFA’s new £5bn Regional Framework to play in PSBP2.

The Regional Framework is divided into six regional lots and individual projects awarded through the framework are expected to be worth £3m to £7m, but could range from £200,000 up to £12m.

Last month, Construction News revealed the 37 contractors invited to tender for the Regional Framework, which is due to become operational in July.

The tender list is dominated by national main contractors, with Bam Construction, Kier, Wates and Willmott Dixon invited to tender for all six regions.

Bowmer & Kirkland is competing for five regions, Morgan Sindall for four, and Galliford Try for three.

However, Mr Green said he hoped some of the smaller regional firms shortlisted for the framework would be successful at the tender stage.

“I genuinely believe we need a mix of contractors,” he said, in order to carry out small refurbishments as well as larger projects.

“Our desire is to have a mixture of contractors on there that can do what we need [but] clearly there is a procurement process to go through,” he added.

PF2 ‘not suitable’ for PSBP2

Private finance would not be suitable for the £2bn second phase of the PSBP, Mr Green has told Construction News.

PSBP2 will be entirely capitally funded, unlike the current programme that is trialling private finance 2 with 46 schools to be rebuilt with £700m of private finance.

Mr Green denied the government was turning its back on PF2 by choosing to fund PSBP2 from the public purse, but said “the suitability is not there” to use private finance for the second phase.

“Private finance is whole-school solutions. We suspect a large part of [PSBP2] will be block solutions,” he said.

The PSBP is the first programme to use the government’s revamped version of private finance initiatives. The EFA is procuring a financial ‘aggregator’ to raise a central pot of private money for the programme, with a bidder due to be appointed this summer.

“We’re using the private finance bit we’re doing at the moment to help us make some decisions on where we go with PF2, and we still have work to do,” Mr Green said.

Wates managing director of education and investment Steve Beechey welcomed the capital funding, which he said was a faster and less complicated way of getting projects off the ground, but added that the debate over long-term financing arrangements should continue.

“One of the advantages I think private finance has is there is that commitment [from the contractor] to the maintenance and the lifecycle of the building,” he said.

When capitally funded schools are handed back to local authorities, there is no obligation to ensure they are properly maintained, he added.

Mr Green said it is not yet known how many schools will benefit from PSBP2, but that school condition surveys being carried out under the Property Data Survey Programme would show “that the work is there to be done” when it completes this August.

EC Harris head of education Marcus Fagent said more than 500 schools in England could be repaired under PSBP2, as the spending per school is expected to be lower.

Wates managing director of education and investment Steve Beechey welcomed the extension of the PSBP, which he said validated contractors’ investment in the education sector and the efforts put into the programme so far.

“It’s another really important step forward in addressing the issues with our school estate,” he said.

“When you’re investing in resources and bid teams, it’s really important to have a pipeline of work to make those investments against.”

Mr Beechey and Mr Green spoke to Construction News at the opening of the first school to be completed on the PSBP, Whitmore Park primary school in Coventry (pictured).

The school’s dilapidated building was intended to be a temporary facility when it was built in 1951. Wates delivered the new £5m school for 630 pupils with a 39-place nursery in 46 weeks.

Mr Beechey admitted it had been challenging to meet the EFA’s standard PSBP £1,465 per sq m cost target in delivering the school, but that the contractor’s ‘kit of parts’ approach had kept costs down.

“We built this for £1,466 per sq m, and it has been challenging, and we’ve had to be really efficient in processes and how we’ve gone through procurement in terms of materials.

“We’ve looked at it as a batch of schools – there are five schools in the batch and we’ve designed and procured as a batch,” Mr Beechey said.

Bam Construction has been forced to return five schools from the £75m London capital batch to the EFA, due to being unable to meet its cost targets for two special schools in the batch (see box).

Mr Green said he was confident the EFA would meet its target of completing the first phase of the PSBP two years ahead of schedule, by 2017.

“There’s one school in the way of High Speed 2 at Euston that might give us a headache. But I can say 99.9 per cent, we’ll get it done. The progress we’ve made [to date] is what gives us permission to do PSBP2.”

Construction has started at a further 27 schools to be rebuilt under the first round of the PSBP and design work has begun at 234 schools.

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