Lack of interest in local education partnership forces North East Lincolnshire to change plan

North East Lincolnshire council has abandoned plans for a £137m PFI scheme to bring all its secondary schools up to date because of lack of interest from the market, in a move experts warn could be the first of many.

The council wrote to potential bidders telling them plans to set up a local education partnership (LEP), the model preferred by funding quango Partnerships for Schools (PfS), were being scrapped. Instead, the council will attempt to get the programme built directly under the academies framework.

A LEP is a PFI partnership between the private sector consortium, the local authority and PfS’ investment arm, which can also be used to deliver additional projects – such as health and leisure facilities.

People are asking, ‘will LEPs survive the Tories?’

Richard Nelson, WGI

The council intended to rebuild, merge or refurbish nine schools over a five-year period, with the first completing in 2012. But it is understood only one consortium, led by PFI specialist Equitix, expressed interest. The letter to potential bidders said: “Though several contractors showed an interest, it became apparent the LEP route is not attractive to the market.”

It confirmed that the new procurement route meant there would be no PFI element to the programme, which would instead be procured via design-and-build contracts. The council now has to apply to PfS with a revised outline business case for its programme, which it hopes to get approved in the new year.

Richard Nelson, business development director of architect WGI, which is on a number of the consortiums in the academies framework, said potential LEP bidders were struggling to raise PFI finance, but were also concerned about whether a future Tory government would support LEPs. “LEPs aren’t getting enough interest. People are asking, ‘Will they survive the Tories?’”