Construction firms seek clarity on BSF contract review

Construction materials firms have warned that the industry faces the loss of business worth £3.5bn if ministers cut the Building Schools for the Future programme.

The government is to review all BSF contracts signed after 1 January. Some £2.2bn of contracts have been finalised since then to build 118 new schools, with a further £1.3bn of deals, for 58 schools, having reached selected bidder stage, The Times reports.

Michael Ankers, chief executive of the Construction Products Association, which represents the manufacturers, said: “Contractors are very worried. While we recognise the importance of making cuts, it is also important to have clarity and transparency on what will be affected.

“Construction will go on without big school projects, but the growth in education spending has been phenomenal - it has been a great growth area,”

A CPA spokesman said: “Construction is still in recession and it is about 9% of gross domestic product, its recovery is essential to wider economic recovery and there is a lot of uncertainty around government spending, not just on schools but also on transport infrastructure.”

The association’s state of trade survey for the first quarter of 2010, published last month showed construction activity contracted for the seventh consecutive quarter and order books remained depressed.

Half for firms expected sales to decline in the second quarter, through 45% expected improvement.