Legal threats spurred BSF approvals, contractors claim
The threat of legal action from contractors ensured that the government approved scores of “sample” secondary school projects and academies, Construction News reported.
In a series of tough negotiations, a number of companies made it clear to the Department for Education that they were willing to go through the courts to secure compensation for bid costs on scrapped schemes.
All 33 sample schemes under review since the Building Schools for the Future programme was axed were approved by Education Secretary Michael Gove last week, along with 44 projects that were suspended through the academies framework.
One source told the magazine: “Conversations were going on in the industry and it was made quite clear to the government how far back their arm would be twisted. Some contractors were quite bullish behind the scenes.”
Another said: “This will calm people as it will allow them to recover much of the costs they have invested. The pressure for compensation will now fall away.”
A government spokesman confirmed that legal advice was a part of the decision: “Most of these sample and academy projects were very close to financial close so clearly legal advice was something we looked at carefully.”
Balfour Beatty benefited the most from the BSF announcement, with nine sample schools now going ahead across the Derby City, Ealing, Hartlepool and Oldham BSF schemes. Bam Construct saw six schools secured, at Camden and Somerset.
Stephen Ratcliffe, director at the UK Contractors Group, said: “This announcement will maintain a pipeline of work, with much of it virtually started on site already. It is vital as it will keep teams together.”
In a separate story, Building reported that design and cost consultants have attacked the government for lack of clarity about what cost savings must be made by 75 threatened academies, currently under review, in order to avoid cancellation.
A source at a major consultant said: “We’re trying to get hold of any information we can on our academies, but nobody has been given any indication. I’d expect cuts of about 30%, but I wouldn’t throw money at finding a solution because a good portion of the 75 will probably be cut in October anyway.”