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Smaller firms ‘at risk’ from upcoming James Review

Major contractors have warned that subcontractors are at risk from the James Review of schools building, while political wrangling is said to be holding up publication of the long-awaited report.

Originally due before Christmas, the final report is now expected in late March or even April, amid claims the government is desperate to strike the right note with the new system.

It is thought the government is determined to show the former Labour government’s BSF programme was wasteful, to reduce the political impact of a dramatically cheaper new system.

One source said: “This is highly political. Mr Gove would not want this to go wrong. It has been the most well trialled, well trodden report we’ve ever had.”

Contractors fear that along with a reliance on offsite manufacturing, standard designs, smaller areas and quicker procurement, there will be pressure on them to reduce their costs.

Major firms warn this would lead to a dangerous squeezing of subcontractors.

Those who have contributed to the review process fear they will be expected to remove about 10 per cent from their prices.

One contractor said: “Materials prices are soaring, labour rates can’t get any lower and value engineering is what we already do. So how do we find the 10 per cent?

“If we cut our margins we damage the business. It always goes down the supply chain.”

National Specialist Contractors Council chief executive Suzannah Nichol (pictured) said: “You can squeeze and squeeze and you come to a point where you don’t have a supply chain. Contractors need to work smarter.”

Education secretary Michael Gove commissioned the task force in July 2010 to propose a schools building system to replace BSF.