BSF delays put public sector lifeline in doubt, David McLean collapse signals danger for medium-sized firms, £4bn loan package could give industry a lift

Three schools projects worth a total of almost £2bn have fallen behind schedule and failed to appoint contractors as expected this month. The news came as a blow to firms relying on public sector work to compensate for the downturn, said Building magazine.

Preferred bidders have still to be named on schools worth £1.2bn in Birmingham, £350m in Salford and Wigan and £300m in Barnsley. Project sources attributed the delays to to the scale of the schemes and the limited experience of the clients. One contractor told Building that this raised doubts over councils' ability to fit in with government plans to accelerate the school building programme.

Contractor and house builder David McLean went into administration this week, putting up to 320 jobs at risk at the £160m turnover company. Building magazine said that coupled with the demise of £131m-turnover Taggart last week, McLean's collapse indicated that medium-sized companies were no longer safe in the downturn.

Flintshire-based David McLean collapsed with up to £100m of debt. Administrator Deloitte has closed the contracting division but is continuing to trade the house building arm in the hope of finding a buyer. The news came after it emerged that Rok's South West division had announced that 50 jobs are under threat and Wates Interiors said it could make up to 31 people redundant.

Finally, Chancellor of the Exchequer Alistair Darling has announced that the UK's small and medium-sized businesses could be eligible to take a slice of an agreed £4bn loan package from the European Investment Bank.

'Small firms are vital to the strength of our economy,' said Darling. 'We need to make sure that despite the global credit crunch they have access to the loans and capital they need to help their businesses grow and develop.'

It's hoped that around £1bn a year of EIB funding will be secured by UK banks between 2008 and 2011.