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Government blames contractors for £178m schools overspend

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Costs on the first phase of the government’s Priority School Building Programme have risen by £178 million

According to the AJ’s sister title Construction News, the Department for Education blamed construction cost increases and ’a lack of interest’ from contractors for the overspend.

A new Cabinet Office report shows the total budget for phase one had increased to £2.3 billion from £2.1 billion in January 2015.

Phase one includes the rebuild or refurbishment of 260 schools in the worst condition across England.

A total of 214 schools are being funded through capital grant funding, with the remaining 46 backed by private finance.

The Cabinet Office report said: ’Over the last 22-24 months we have experienced a lack of interest from the contractors in the new batches being released into procurement, and delays on a number of schemes as contractors seek additional funding to cover increasing costs of labour and materials.’

It said this had caused delays in its internal delivery programmes, with expenditure slipping backwards and an increase in the overall cost to deliver the programme.

To mitigate these risks, the government has increased the number of procurement routes for priority schools to include the Education Funding Agency’s Contractors’ Framework and Regional Framework.

It has also procured two batches of schools using the CSS modular framework and said it was ’preparing documentation’ to allow for projects to go through the OJEU portal.

‘The Education Funding Agency is also reviewing the location factors and the base funding rates to ensure the funding envelopes we set are competitive,’ it said.

It added that every project has a ‘back-up’ option available.

‘Should a procurement fail, the project has been named in a second procurement so it can be quickly switched to a second procurement option.’

The majority of new or refurbished school buildings will be handed over by the end of 2017.

However, the government admitted that for the projects affected by ’market interest and technical issues’, delivery timetables will go beyond the 2017 deadline.


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