BSF programme axed by Gove

Software provider to schools has released a statement in response to the announcement

BSF has been axed

The confusion around the Building Schools for the Future (BSF) programme, of which a significant part is the provision of IT for schools, has been cleared up today. Schools minister, Michael Gove has axed it.

The £45bn scheme, launched by the previous government to rebuild or refurbish England’s secondary schools, was to take place over the next 15 years, with ICT spending expected to reach £4.5bn over the programme’s lifetime.

But the recent ICT contracts coming out of the BSF programme and announced over the past few weeks are in line with the review proposed by Gove. It will not stop already advanced plans for school building, or implementing ICT contracts within schools. Some 44 BSF projects will go ahead (those that have been paid for) with 58 projects cancelled. Those at an advanced stage will be reviewed on a case-by-case basis.

Of the schools that were due to see ICT refits, only 26 of the 89 planned will go ahead, according to analyst Techmarketview.

Most of the recent BSF ICT deals announced have been with software supplier and integrator RM, which released a statementtoday on the decision.

The statement says that RM has reached financial close on 14 BSF projects. It also says that a large majority of the BSF schools RM had anticipated delivering in full-year 2010 and 2011 are part of these 14 projects, although it does not give details on how much of the business has been approved.

RM has previously announced that it has been appointed preferred bidder for a further seven BSF projects, with a total value of £200m of which £121m was included in the committed revenue figure of £505m disclosed in the Group's interim results announcement.

These projects will now be subject to review and may be scaled back significantly.

According to Reuters, the review sent shares in the company down 12.5 per cent to an eight-month low of 141.75 pence.

Analyst Arun George at Execution Noble was reported on Reuters to have said that the review was worse than expected, as trade reports had indicated that the majority of projects at preferred bidder status would go through.

He anticipated that BSF revenue and bid cost expectations for the next two years would be significantly scaled back.

The company said in its statement that it expects to see an increase in ICT spending outside the BSF programme.