Ministers turn to insurers from PFI cash as bank funding fails

Norwich Union is being asked to bail out the cash-strapped Building Schools for the Future project designed to rebuild every secondary school in the country, the Times reports

It said: “The £45 billion Building Schools for the Future programme, half of which is under PFI, is facing serious problems finding finance to rebuild or refurbish 3,500 secondary schools.

“Behind the scenes, the Treasury is now exploring a range of options to try to restart the schools scheme, including shorter timescales for PFI deals. A £300 million loan from the European Investment Bank has been agreed and some councils are now offering bridging finance to allow building to start.

“Partnership for Schools, which is responsible for monitoring the programmes, said that so far about six banks had come forward to offer finance. Talks are being held with other possible funders, such as Norwich Union, the insurance company, and Nationwide, the building society.