Primary school projects

Roughly £280m of new construction and refurbishment work on primary schools is expected to be announced this month as the government brings forward spending previously earmarked for 2010/11.

The funding will be made available by central government to the 41 local authorities in England and Wales that have already had projects designed and approved.

The £280m forms part of the £800m put aside for four schools modernisation projects announced in the pre-Budget report in November. The education pot is itself part of the £3bn package to kick-start the construction industry in 2009.

A further 109 local authorities are also being asked to identify refurbishment spending on primary schools which can be accelerated, but their plans will then need approval from the Department for Children, Schools and Families.

Most of the projects being brought forward will be small-scale modernisations and refurbishments, which are likely to benefit small and medium-sized firms.

The £280m is also part of the £7.02bn capital investment already being pumped into schools under the Primary Capital Programme over 15 years. The overall aim is to rebuild or refurbish half of all England’s 17,000 primaries.

Contractors working on PCP projects can expect a relatively straightforward procurement process handled directly by the local authorities. The DCSF has decided not to use the established delivery body for education projects, Partnerships for Schools (PfS), in the process. Contractors have previously criticised PfS for its slow progress on Building Schools for the Future.

A spokesman for the DCSF said the decision to leave out PfS and take on management of the programme directly was taken because ‘primary schools are much less complex than secondary schools and therefore setting up the type of Local Education Partnership-style (LEP) joint ventures used in BSF was not appropriate.’

However, the spokesman added that some local authorities will include primary school building programmes in their LEP, in which case PfS may become more involved.

South America

UK Trade & Investment (UKTI) is advising British construction companies suffering in the recession to target Mexico and Brazil where massive investment in infrastructure projects is planned.

‘The current lack of infrastructure in these countries is hindering economic growth,’ said David Howell from dmh Consultancy, which was commissioned by UKTI to produce two reports highlighting opportunities. ‘Both governments recognise this and have committed a combined total of almost £300bn to this sector.’

Infrastructure spending in Brazil will increase by almost £140bn, and includes funding for new highways, railways, waterways, ports and airports. The Mexican government has committed £155bn to finance similar works, plus telecommunications projects, water supply, oil and gas production.

‘Rapid growth within the construction sector coupled with a severe skills shortage in Brazil and Mexico means that opportunities for UK firms are plentiful,’ added Howell.

Social housing

A month after the launch of the new Homes and Communities Agency (HCA), its deputy chief executive Eamonn Boylan has urged contractors to be ‘optimistic but realistic’ about the amount of work it will tender in 2009/10.

After inheriting the combined budgets of the Housing Corporation and English Partnerships, the HCA will be spending £5.75bn a year for the next three years.

This includes grants to housing associations under the National Affordable Housing Programme, and the Decent Homes refurbishment programme.

As for new work, Boylan pledged that the HCA’s priority would be ‘maintaining the capacity and momentum of the construction industry. We want to promote the development of affordable housing wherever we can.’

In the November pre-Budget report, the Treasury announced that the HCA would bring forward £775m of housing and regeneration investment to help preserve jobs and skills in the sector. ‘We’re looking at what can be accelerated and consolidated. Generally it’s good news – we can bring forward projects at greater speed,’ he said.

However, affordable housing projects part-funded by section 106 payments from private developments have been badly hit by the collapse in the housing market. To compensate, the HCA will be looking at a variety of options to deliver projects.

‘We’re considering how we can use our own land holdings and sites that adjoin other landowners’ to bring forward development,’ said Boylan. ‘And we wouldn’t rule out a direct development role [for the HCA], although that’s yet to be decided.’

Darling’s 2009 rescue plan

  • £800m on schools and facilities, £442m on improving colleges and universities
  • £675m on various energy efficiency and infrastructure improvements, repairs and building of social housing
  • £725m for railways motorways, flood defences and the waterways network
  • £100m to upgrade general practitioners' surgeries, £20m on improving police facilities.