Existing BSF projects not to be funded

20 Jul 2011

The Education Secretary, Michael Gove, chose the day of Rupert Murdoch's appearance in the Commons to announce that the government is 'minded not to fund the BSF projects which were subject to judicial review earlier this year'.

This will be a great disappointment to those schools that had been expecting to be rebuilt until the Building Schools for the Future scheme  was scrapped by the incoming coalition government (see this article for the views of parents in Newark on the scrapping of BSF: www.mikebakereducation.co.uk/articles/87/scrapping-bsf-left-children-in-decrepit-schools.)

Six local authorities are likely to be eligible for indemnification of their outstanding contractual liabilities. The authorities, which in February won their judicial review against Mr Gove's decision to withdraw funding from their BSF projects, were:

  • Luton Borough Council
  • Nottingham City Council
  • The London Borough of Waltham Forest
  • The London Borough of Newham
  • Kent County Council
  • Sandwell Metropolitan Borough Council.

A High Court judge ruled that the Education Secretary, “unlawfully and without justification”, failed to consult with the authorities as to the effect on their individual projects of his possible decision options.

New private finance scheme unveiled

Meanwhile, Mr Gove also announced yesterday that there will be a new privately-financed school building programme, worth about £2 billion in capital costs (the money will come from the contractors, not the government - see below for how private finance works).

This programme will be worth the equivalent of rebuilding about 100 secondary schools, although in reality funding will be available to all types of school, including primary, special and 6th form colleges. Partnerships for Schools estimates that it will therefore mean anywhere between 100-300 schools will be rebuilt. 

About 20% of this number of schools will be rebuilt each year with the first to open in the school year 2014-15.

How private finance works

Private finance involves the building contractor providing the initial capital costs of the rebuilding. When the new school is open the contractor charges that school a monthly fee to cover the repayment of the capital outlay,  a facilities management charge, and extra on top to provide a profit.

Full details of the announcement - and the accompanying Commons statement - can be found here: www.education.gov.uk/a00192488/michael-gove-announcement-on-education-funding

User Comments

Rebecca Hanson - 21 Jul 2011

How private finance DOESN'T work

PFI in education is proving to be disastrous in Scotland. Here's just some of the early data:
http://scotland.gov.uk/News/Releases/2010/03/19142542

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