Credit crunch hits school rebuilding programme
The National Audit Office says councils are struggling to borrow money under the Private Finance Initiative to build schools fitted with new ICT
In a report on Building Schools for the Future (BSF), the programme to rebuild secondary schools and equip them with the latest technology, the NAO says that during 2008 problems in the banking sector reduced the money available to lend.
Of the £45bn predicted total spend on BSF, 10% will be allocated for new technology. As a result of the credit crunch, however, it has become increasingly difficult for local authorities to find lenders for the PFI deals used for BSF.
In October 2008 Kent CC was the last local authority to agree a PFI contract for its BSF programme. LB Newham intended to use the PFI to build two schools when it established a Local Education Partnership (LEP) between itself, a construction company and an ICT supplier in January 2009, but had to use conventional funding instead.
The report says that BSF projects already under way have not been delayed because of the economic conditions, but the extent to which problems in the finance markets will affect BSF is unclear.
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