Welsh finance Minister Jane Hutt said the non-profit distribution model pioneered in Scotland would be employed for the delayed second phase of school building from 2019.

Speaking during a plenary debate on the Draft Budget 2015-16, the Minister confirmed the £500m investment would be used to fund Band B of schools planned under the programme.

She said: “The next phase of the 21st Century Schools programme will commence from 2019 and work will now begin to plan and prepare this second phase of investment, which will see half a billion pounds raised using the NPD model.

“We will continue to work with local authorities and the WLGA to ensure that we achieve the outcomes we all want – to continue to improve the quality of learning environments while achieving greater economy from the use of our assets.”

This new investment in the 21st Century Schools Programme is in addition to the £170m of innovative funding through the Local Government Borrowing Initiative, which is already accelerating the delivery of the initial batch or Band A of the programme by from seven to five years.

So far Willmott Dixon has featured as a main delivery contractor after picking several major school projects.

Wales is presently using the non-profit distribution model to help fund the redevelopment of the Velindre cancer centre, and dualling of sections 5 and 6 of the A465.

The new funding approach for the next phase of school will favour larger contractors and reignite the debate about using more local Welsh firms for investment programme delivery.