Another Brick in the Wall

This week, our Managing Director for Construction, John Craig spoke with “Construction News” about the future for education and construction within Osborne.

The government will need to tackle the UK’s school place shortage, with education spending cuts on the horizon, according to Osborne’s new construction managing director.

In the party’s pre-election education manifesto, the Conservatives promised to maintain per-pupil spending at its current level, but Prime Minister David Cameron said it would not increase with inflation.

The Institute for Fiscal Studies estimated that this could translate to a real-terms cut of 12 per cent over the course of the parliament.

“It’s a consideration rather than a concern,” said John Craig, who was previously Osborne’s education director, when asked about the potential cuts ahead of last week’s general election. “Will that affect the speed at which schools can be delivered? The answer is, I don’t know.”

“What I do know is there is still a shortage of school places and whether you provide those through traditional methods or new ones such as free schools, it doesn’t take away from the fact that we have a shortage of school places.”

Education accounts for around half of turnover generated by Osborne’s construction division, which is expected to bring in a total of around £170m for this financial year.

While that figure would represent a 42 per cent jump on 2013/14’s £120m, Mr Craig said growth was “modest”, as a significant part of the turnover came through delayed projects that were only secured last year.

Mr Craig said that although the construction division could expand into new markets, education, along with health and commercial work, would continue to form a large part of its portfolio.

He told Construction News there would be no “big bangs” from the contractor in the months ahead as it focuses on retaining and building client relationships.

As well as winning work from new clients, he said being “open and honest” with clients from the beginning of a contract would enable Osborne to retain existing customers.

Mr Craig took over from Andy Steele in his new role in February after the latter replaced the retired David Fison as group chief executive. He revealed that the company had bagged a £20m contract with the University of Winchester to build new learning conference facilities – the group’s seventh deal with the university.