While councils may be minded to claim back wasted costs, private sector players are just focused on not making a bad situation worse

Since Michael Gove announced the demise of much of the £55bn Building Schools for the Future Programme there has been a lot of talk about potential claims against the government or a procuring authority for wasted costs or lost opportunities, but little action.

That all changed yesterday when three (Labour-led) councils in Nottingham, Luton and Waltham Forest launched legal challenges to the decision.

Is this surprising? Probably not. But a consensus would appear to be emerging through the majority of private sector players that challenges could turn out to be compounding an already difficult situation. 

There are still opportunities to be considered (not the least under the academies framework), there have been some sample schemes to close and the Comprehensive Spending Review results are yet to be announced. 

It’s probably also worth remembering that the private sector is used to (even if it doesn’t like) taking risks on projects which they don’t always win – albeit perhaps not on the scale of July’s announcements.

By contrast, many authorities may not be so sanguine. The public sector did not develop projects, meet PfS’s stringent criteria and run up the significant costs required by the BSF programme, in the fear that at any stage the funding and the programme could have been scrapped. Many feel that they had a legitimate expectation that funding that was approved after January this year would be provided.

It is interesting to see that the councils mentioned above are at quite different stages of the process - Nottinghamshire was at the beginning of the process, anticipating £150m for nine schools, Luton has already reached financial close on its sample schools but has had future schools cut.  Waltham Forest has been involved in the programme since 2003 and has already built or refurbished five schools under its programme.

Other authorities, the contractor and sponsor market (and the secretary of state too, one might assume) will no doubt follow these new developments with interest. It seems the BSF saga is not over yet.