Business barometer: August league table leaves no doubt about importance of education sector
Going back to school paid dividends for Bovis Lend Lease after it spectacularly gatecrashed the contractors’ top 50 for the first time this year. Indeed, it went to the top of the class.
August’s league table again reflects the industry’s heavy reliance on public sector spending, and increasingly education in particular, to provide gainful employment.
Bovis Lend Lease’s success came from three Building Schools for the Future (BSF) projects: the £180m contract for the first phase of Birmingham council’s BSF programme, and two more projects in east Lancashire for Lancashire council worth a total of £71m.
School work also propelled second-placed Amey back into the top earners. The firm’s high standing came entirely from its £151m slice of the second phase of the £230m Bradford schools PFI project. Amey is part of a consortium that includes its parent Ferrovial, Costain and HSBC.
Even when civils work is added, Bovis and Amey still ranked as August’s second and third earners behind Balfour Beatty, which took the top slot after securing its largest monthly haul since January. But even its £718m total was boosted by its share of the £250m Stoke-on-Trent BSF scheme.
In a week when the government and opposition were falling over themselves to warn of future spending cuts, it looks doubtful that the industry can rely on taxpayers’ largesse to keep it in the black.
Plans to overhaul out-of-date college buildings have been effectively mothballed, and a similar scaling down of refurbishment plans in schools or the health sector will leave the industry vulnerable if the recovery fails to materialise and the commercial sector is unable to pick up the slack.
But for now the old government’s old “education, education, education” mantra is certainly helping the industry with its sums.
Over the year, Balfour remains comfortably ahead of all rivals, with Skanska and Laing O’Rourke not so much snapping at its heels, as trailing in its wake.
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