Kier and Interserve battle for £40m schools

Kier and Interserve have been shortlisted for the next batch of schools to come to market through the government’s flagship priority school building programme.

Building understands the contractors have been invited to bid for the batch of schools in the south of England, understood to be worth around £40m, which are the latest to come to market through the £400m directly-funded element of the Priority School Building Programme.

It is understood that just three firms bid for batch, which comprises 8-10 schools in Devon, the Isle of Wight, Kent, Poole, and Southampton.

As Building revealed last week, Carillion and Bam Construct have been invited to bid for the first of two batches of schools in the North-west to come to market, worth around £42m.

The news comes as the Department for Education confirmed it was continuing to work alongside the Treasury to source private finance for the £2bn Pf2 element of the PSBP, with a number of options being considered including capital bond markets and the European Investment Bank.

A DfE spokeswoman said: “It is essential that we take time to secure the right finance arrangement for each school and the best possible deal for the taxpayer, and we are looking at a number of options including a bond finance solution.

“We are working closely with HM Treasury on the development of a financing solution for the privately financed schools. As a part of this, the Education Funding Agency is speaking with interested parties in the funding market, including the European Investment Bank, about possible participation in that funding solution. No formal role has been identified or agreed beyond this.”

Work through the PSBP was initially expected to be tendered in April 2012 so construction could begin in 2012 but, as Building first revealed in March last year, was pushed back to “late summer”.

As Building revealed in August, the programme was then delayed again, with the Pf2 element not expected to come to market until the first quarter of this year.

But the DfE insisted that the Pf2 element of the PSBP was still on track, with the first schools to come to market “shortly”.

The spokeswoman said all 261 schools in the programme had “received confirmation of when we will start working with them”.