Contractors and LSC meet over PFI plans for delayed colleges

Leading contractors and colleges called on the Treasury this week to back a move to deliver the Learning and Skills Council's 133 delayed college building schemes via the private finance initiative (PFI).

The schemes were left high and dry last week when the LSC revealed that only 13 schemes on its £3.4bn Building Colleges for the Future programme would get the go ahead due to a severe funding shortfall.

As CJ revealed last week, funders and PFI contractors are keen to step into the breach. Contractors that have indicated interest in using PFI to deliver the delayed schemes so far include Willmott Dixon, BAM and Interserve.

Next week the UK Contractors Group is to meet with David Hughes, the LSC national projects director, to push for alternative delivery solutions including PFI.

The Association of Colleges has also leant its weight to the plans. In a statement it said: "AoC wants to help colleges explore alternative ways of funding projects and we will be running a series of events this year to help them do so - including a summit in July. Colleges have a long history of innovation and resourcefulness that they can tap into when seeking alternative funding streams, given the chance."

BAM's marketing director Chris Gilmour said BAM was keen to deliver colleges via the PFI route. He commented: "We'd be very interested to talk to the LSC about moving our delayed schemes into PFI.

"We are already involved in BSF and would be keen to invest in colleges in the same way as part of BAM's investment business.

"However, the deal would have to be underwritten by the central Government."

Sources close to the LSC said colleges were exploring the option of PFI but were concerned that the Treasury guarantee any PFI deal.

The source said: "The concern is the unitary charge. Colleges need to know that if their student numbers fell for some reason they would be supported by a Government-backed guarantee.

"Building Schools for the Future has that. Now colleges want the same. It all rests on the Treasury."