Glenigan analyses effect of schools cutbacks
A surge of projects reaching financial close within the last year and the last few months will moderate the impact on the construction industry of the Government’s announcement on the flow of schools projects, according to Allan Wilen, economics director with Glenigan. He says, ‘In total, there are some 700 schools that have already opened, started on site or reached financial close. Many of the axed projects were at a very early stage of development and were not scheduled to start on site until 2013 at the earliest.’
169 schools had been completed by the end of the 2009/10 financial year.
Education projects accounted for nearly 19% of all UK construction project starts in the last 18 months. The cancellation of the Building Schools for the Future programme means 715 schools around England and Wales will not be built or refurbished. Following confusing announcements about which projects have been affected, Glenigan has published a report to clarify the status of every BSF project.*
The impact over the next two years will be dramatic. Projects cancelled total £12 bn due to start on 2010, £22 bn in 2011 and £24 bn in 2010. Projects worth £5.8 bn are unaffected. However, starts may fall back sharply to only £466 m by 2012. Projects worth £873 m are under review, and projects worth £5 bn have been scaled back.
*‘BSF — the aftermath’ can be downloaded from www.glenigan.com/projects/bsf_report.aspx and costs £295.
