LGA wants limits on schools PFIs

The Local Government Association (LGA) is calling for schools contractors to be limited to no more than three schemes under the government's £5.1bn Building Schools for the Future initiative.

The programme will oversee the renewal of the nation's secondary and primary school stock over a 12-year period, using a form of public private partnership based on the NHS LIFT model.

In its response to the Department for Education and Skills' (DfES) consultation document, the LGA questioned whether there is adequate capacity to ensure competition.

It stated: "The market is likely to be limited to relatively few large contractors. In this situation, the LGA has grave concerns about the adequacy of competition arising.

"Framework contracts for several years may distort the existing market and there is doubt whether partnership contracts of greater length than the funding commitment (three years) will produce price competition.

"The LGA would like examples of how competition will be achieved and notification as to whether one bidder will be limited to two or three schemes, or by value or in some other way."

The LGA is calling on the DfES to stagger the programme to prevent soaring costs and to ensure the involvement of medium-sized contractors.

The LGA also questions the use of the NHS LIFT model as a blueprint, when it has yet to close a deal. It questions whether introducing a new form of procurement will cause yet more delay to school improvements. It comments: "This method is largely untested and this causes concern with such an ambitious programme.

"The market for schools PFI has reached a stage where bidders understand what is required of them by their clients: the LEAs and the schools they serve. The strategic renewal carries a danger that by passing the role of client to a new national body, this progress will be wasted."

A leading schools contractor dismissed the LGA's concerns on capacity. He said: "Using a LIFT style model will increase capacity by bringing new blood into the market, which the current system is patently failing to do."

The DfES said it is considering the consultation document and will deliver its response later this month.