Axe falls on BSF projects at preferred bidder stage

Aaron Morby 12 years ago

Education Secretary Michael Gove has closed the school building programme and axed all projects not at financial close.

Some 58 BSF projects covering nearly 715 schools have been cancelled with immediate effect.

The cuts are far more savage than the industry expected and hit a large swathe of national contractors who were named preferred bidders on massive BSF schemes.

In the last few weeks alone around £1.5bn worth of projects reached preferred bidder stage.

Mr Gove said he was making tough, immediate decisions to help get the best value for money in a massive overhaul of spending.

“In the light of the public finances, it would have been irresponsible to carry on regardless with an inflexible, and needlessly complex programme,” said Gove.

One contractor told the Enquirer: “This is devastating news. A lot of firms have spent millions of pounds bidding these projects and now we are left with nothing.

“This has hit all the big names in construction.”

School rebuilding and refurbishment projects identified by affected local authorities may go ahead at a later date. But this will depend on the outcome of a new education review launched by Gove.

The review will be led by Sebastian James, group operations director of high street retailer DSG international, formerly Dixons.

His team also includes Sir John Egan, former chief executive of Jaguar and BAA, Kevin Grace, Tesco director of property services, Barry Quirk, chief executive of Lewisham and John Hood former Vice-Chancellor of University of Oxford.

They will look at how best to meet parental demand, make design and procurement cost-effective and overhaul how capital is allocated and targeted.

Sebastian James, chair of the review, said: “I am delighted to be involved in this vital project and feel very passionately that we can build a schools infrastructure in Britain that is truly world class, while significantly reducing our spending.

“In my view, success in this review means that we will have found a way to have great schools for our children against a more measured investment backdrop.”

Just 44 existing BSF projects, which had reached financial close will continue, alongside sample projects from a further 14 close to this stage.

This means that 700 schools and academies will continue with their building, rebuilding and refurbishment plans.

Some 123 academy projects still in development, which have not reached financial close, will be looked at on a case-by-case basis.

Gove also cut the £972,000 annual funding for the Commission for Architecture and the Built Environment for design advice on the BSF programme.

BAM Construct UK said ahead of Gove’s statement it would be better to save money by simplifying the procurement system rather than axing projects altogether.

“You could build a primary school for the price of what it currently costs to bid successfully for a BSF (project),” said BAM Construct design director Chris Gilmour.

BAM Construct is preferred bidder for £850 m worth of BSF work at Somerset and Camden in London, and is bidding for £350m of contracts in two other authorities.

Balfour Beatty has won BSF contracts with five local authorities and is the preferred bidder in three others.

Around 180 schools have been built or refurbished since the programme began in 2004.

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