£100m Building Schools for the Future bid costs lost

Landscapers and other contractors lost £100m in wasted bidding costs after the coalition cancelled the Building Schools for the Future (BSF) initiative.

Experts totting up the cost of the project, launched eight years ago by Labour, found the recent axing of BSF triggered a multi-billion-pound domino effect of waste.

The BSF report came as three councils said they would seek a judicial review on the axing. Nottingham, Luton and Waltham Forest want to overturn the decision, saying the lack of funds would have a "catastrophic effect" on pupils.

Report author AMA Research said construction sectors can expect overall capital expenditure losses to be as high as £39bn between now and 2013, which was the original end date for BSF.

The cost of wastage is nearly four fifths of the projected total cost of the initiative, which would have transformed the entire secondary-school estate.

Only 186 new-build schools had been completed by the time the coalition axe fell, which immediately cancelled 715 rebuilds and refurbishing projects.

Councils alone spent more than £200m on paperwork and legal fees for contracts that were eventually dropped, and the knock-on effects would rumble on.

"As the construction industry considers the impact, important questions arise over the consequences, both legal and commercial, for those involved at all stages of the supply chain," AMA advised.

However, it said the coalition was "still intent on a school rebuilding programme at some level" for less money and on a less ambitious scale than previously planned. The construction industry and wider supply chain will need to wait for the comprehensive spending review due in the autumn.

Opportunities for contractors were likely to be smaller scale than those under BSF. But smaller packages of work were likely to come to the market sooner than under BSF.

"The challenge for the construction industry will be to adopt an innovative approach to design and construction as existing buildings are remodelled. It will also mean operating within even tighter budgetary constraints and increasing pressure on bidders to keep costs as low as possible."

- For further details, visit www.amaresearch.co.uk.

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