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New PF2 private finance model for £700m of school building

10 May 13 The Education Funding Agency has announced that 46 schools are to be rebuilt using the government's new system of private finance under the next steps of the Priority School Building Programme.

The required £700m funding will be raised using a new PF2 ‘aggregator’ model, able to access both the bank debt and capital markets to secure the best deal.

The Hertfordshire, Luton and Reading batch will be launched at a bidders day due to be held by the EFA on 28 May 2013. A notice inviting bids from firms interested in constructing and maintaining the schools will be published in the Official Journal of the European Union in June.

The other batches, to be released to the market over the next 12 months, are:

  • the North East
  • the North West
  • Yorkshire
  • the Midlands

The performance of the ‘aggregator’ model will be assessed to inform future investment in the education estate which will be identified by the property data survey programme, due to report in October this year.

Ministers have also announced the allocation of a further £300m of capital funding in the current spending review period to enable an early start for 27 further schools in the programme. These schools will be procured in four batches.

The remaining schools in the programme are intended to be delivered using traditional capital funding, subject to the next spending review settlement. The timetable for the remaining schools in the programme will be announced after the settlement is made in June.

Peter Lauener, chief executive of the EFA, said: “I am delighted we can confirm the schools to be rebuilt through private finance. The government’s new approach to public private partnerships provides a great opportunity for industry to step up to the mark and I am looking forward to seeing innovative and cost-effective proposals.

“These five privately-financed batches, plus the additional four capital-funded batches also announced today, will help us overhaul the schools with the greatest need, ensuring young people can learn in buildings that are up to scratch.”

The five PF2 batches are:

Batch

Approx. no. of schools

Approx. construction Value

Local authorities

Hertfordshire, Luton

and Reading

7

£122m

Durham, East Riding, Gateshead, Sheffield, Stockton-on-Tees, Sunderland

North East

12

£94m

Durham, Gateshead, North

Tyneside, Northumberland,

Redcar & Cleveland,

Stockton-on-Tees,

Sunderland

North West

12

£93m

Blackpool, Cheshire West and Chester, Halton,

Manchester, Stockport,

Wigan, Wirral

Yorkshire

7

£97m

Bradford, Kirklees, North

Yorkshire

Midlands

8

£122m

Birmingham, Coventry,

Derbyshire, Nottingham,

Sandwell

There are twelve batches of schools in the PSBP being funded using capital grant. These will be delivered using the DfE’s Contractors’ Framework.

These batches are:

Batch

Approx no. of schools

Approx. construction Value

Local authorities

North East 1

9

£57m

Durham, East Riding, Gateshead, Sheffield, Stockton-on-Tees, Sunderland

Midlands1

6

£38m

Coventry

London

7

£75m

Barnet, Bromley, Camden, Greenwich, Lambeth, Newham, Waltham Forest

North West 1

8

£47m

Blackpool, Cheshire West and Chester, Halton, Manchester, Tameside

South

7

£30m

Bristol, Devon, Isle of Wight, Poole, Southampton, Wiltshire

East of England 1

6

£33m

Cambridgeshire, Essex, Herts, Kent

Midlands 2

4

£28m

Birmingham, Derby, Notts

North West 2

4

£21m

Liverpool, St Helens, Wirral

West Midlands

8

£39m

Birmingham, Sandwell, Staffordshire, Wolverhampton

North East 2

7

£63m

Hartlepool, Redcar & Cleveland, Stockton-on-Tees, Sunderland,

East of England 2

6

£60m

Essex, Herts, Suffolk, Peterborough

North West 3

6

£48m

Bury, Manchester, Oldham, Salford, Tameside

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MPU

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