Future of school building unclear until Christmas

Construction firms hit by the government’s decision to scrap the Building Schools for the Future programme will have to wait until Christmas to learn how schools work will be carried out in future.

Officials do not expect to complete a review into future school building work until the end of the year, according to education secretary Michael Gove. Senior industry figures say this could mean it will be the end of 2011 before contracts can be awarded on a scaled-back programme.

The announcement of cuts on Monday by Gove was even tougher than had been expected, with only BSF schemes that had reached financial close allowed to go ahead. An announcement on the fate of the 14 schemes at close of dialogue stage (see box) will be made in the next three to four weeks, with the possibility some schools within them could progress. It is unclear when a further announcement on the 123 academies on hold will be made.

A letter from Gove to those authorities affected, seen by Building, suggests that even projects that go ahead could be scaled back.

There will now be intense lobbying at preferred bidder stage to highlight the merits of projects

John Frankiewicz

The review of the future of school building will not be finished until Christmas, even though the government expects to set the levels of future funding in time for the Comprehensive Spending Review in October.

The review, being led by Sebastian James of electronics retailer DSG International, will “overhaul how capital is allocated and targeted”, according to the Department for Education.

The review panel includes Sir John Egan and Kevin Grace, the director of property services at Tesco, which is known for its tough approach to itssupply chain.

Some construction firms could face the loss of up to 70% of their workload as a result of the cuts. One architect, who did not want to be named, said: “I’m seriously worried for the future of our practice. We’ve lost well over half our work. This looks like death by 1,000 cuts.”

John Frankiewicz, chief executive of Willmott Dixon Capital Works, said: “We knew it was coming, but it is still very tough on our industry, especially when you consider the benefits our work brings to local economies. There still needs to be clarification on which academies get approval, and there will now be intense lobbying by contractors at preferred bidder stage to highlight the merits of progressing with their projects.”

Liverpool council estimates that 1,500 full-time jobs, including 1,000 construction jobs, will be lost as a result of its £350m BSF being scrapped.

Council leader Joe Anderson said: “There is a huge knock-on effect for the local economy at a time when the construction industry is crying out for contracts.” He also warned of the impact on housing renewal in the city, as much of that work was “based around the school rebuilding scheme”.