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Public-sector project boost

A new £3bn social infrastructure framework will procure school building projects at the same rates as the Education Funding Agency (EFA).

The Social Infrastructure Development (SID) framework, developed by NPS Property Consultants, will be used to design, finance and build public projects - including schools and housing - and will be funded through the transfer of surplus public-sector land.

Tim Byles, chief executive of Cornerstone Property Assets, which has introduced the first set of education projects to the framework, said that work delivered through it will be “based on EFA framework rates” for school building, but that those rates “will not be enforced” on successful bidders.

The first projects lined up for the framework are foundation schools, which own their own land.

The EFA sets cost per square meter rates for school building projects, which contractors appointed to its frameworks are expected to meet.

Contractors on the EFA’s national framework have said its rates are too low, because of cost inflation across the industry, and that there are more attractive projects with less risk and better margins.

The EFA increased its cost per square metre targets by around 5% in July after concerns from contractors, and in November rebatched around 20 “commercially unattractive” schools from its Contractors’ Framework and put them through its £5bn regional framework, which is designed for smaller building and refurbishment projects.

There are eight projects currently lined up for the new framework, all of which are in the education sector and worth between £10m and £50m.

Up to £3bn of projects are expected to be put through the framework over four years - including care homes, housing and police stations, as well as schools.

Mr Byles said there was an opportunity for contractors to make attractive returns on the delivery of housing for private sale on the same sites.

Around 70 expressions of interest were received for the framework in November and December. Invitations to tender will be sent to 10 contractors in January.

NPS expects to appoint up to seven contractors to the framework, which is expected to go live in April 2015.

It is looking for contractors that also have development arms, including some that operate nationally and others with regional coverage.

Once appointed, successful contractors will engage in mini competitions to bid for each project released to the framework.