Rule changes spark building boom

The construction industry looks set for a cornucopia of local authority and university building work as the Government changes the rules on funding.

From June this year universities and colleges are to be allowed to borrow up to œ4 billion from banks to finance the construction of student accommodation, libraries, sports complexes and lecture halls.

Universities and colleges throughout Britain will, from 1 June, be able to take out mortgages using their capital allocations to service loans for building projects. The move could result in a significant higher education building boom as further education colleges rush to replace and refurbish the old facilities they inherited when they left local authority control, and universities move to meet the severe shortage of student accommodation.

The BEC welcomed the move this week. 'This is just what we have been pushing for and we are encouraging our members to take full advantage of the extension,' said a BEC spokesman.

Meanwhile local authority regulations are to be amended on 1 April to allow councils to set up partnerships with the private sector and to enable them to use their non-housing capital assets as equity to fund joint venture developments. The amendments could create a local authority building boom as council will be free to offer local authority land as equity.