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Credit crunch 'complicates' BSF finance deals

The credit crunch has made the financial deals behind the government’s Building Schools for the Future (BSF) programme more ‘complicated’, according to a Private Finance Initiative (PFI) specialist.

Speaking at the Partnerships for Schools (PfS) annual conference in London, James Stewart of Partnerships UK said the credit squeeze has made banks ‘more reluctant’ to underwrite BSF deals.

Stewart said: ‘Normally we would have one or two banks going into an agreement, but they are more reluctant to underwrite the whole deal, so we’re not seeing that at moment. We’re now bringing more banks into the initial deal, which makes things more complicated as you’re dealing with more people.’

However, Tim Byles, PfS chief executive, said the current financial crisis was not affecting the performance of BSF.

‘Nothing has been delayed by the credit crunch in terms of BSF,’ he said. ‘These are planned syndicates between banks who can gather together to share the risk.’

Meanwhile, Department for Children, Schools and Families (DCSF) minister Jim Knight confirmed that CABE will be helping PfS to introduce a minimum design standard for schools at bidding stage.

Knight said: ‘It will build on the views of CABE’s design review panel and incorporate the thoughts of teachers, parents and the wider community to help architects and designers think how their design can help better learning in other areas.’

The new measure will mean that those designs that do not meet the required standard will be sent back to the drawing board.

The announcement follows early reviews of BSF proposals by CABE’s schools design panel which found that of 25 schemes at planning application stage up until September 2008, 22 were either ‘not yet good enough’ or ‘mediocre’.

Byles told the AJ that he intended to extend CABE’s remit from just looking at sample schools, to reviewing ‘as many as possible’ of the future schools designed and built in a local authority during the BSF tenure.

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