Thursday, July 08, 2010

Why cuts to the PFI 'Schools for the Future' programme should be welcomed

The BSF School building programme involves PFIs that lead to tax rises and cuts in the number of fully trained teachers, for the benefit of big companies - it's welfare fraud for the richest

A PPP built school - new and shiny, but over-priced by annual payments so high that it results in less teachers and less books being available

The cuts to the to the “Building Schools for the Future” programme are one public spending cut we should welcome.

The row over cuts to the programme has ignored the fact that every school and hospital built in the UK since the mid-90s has been funded by ‘Private Finance Initiatives’, invented by Conservative Chancellor Kenneth Clarke in the mid-90s and re-branded as ‘Public Private Partnerships’ by Blair and Brown (1). The costs are many times more than funding construction from taxation or loans, as Professor Allyson Pollock and others have shown. Only 30% of teachers surveyed by the EIS in 2007 said PPP provided value for money(2).

PFI means cuts in the number of fully trained teaching staff in the new schools and shortages of money for other government spending and so increased public debt, taxes or service cuts. It also usually involves maintenance contracts in which private contractors get to massively overcharge for so much as replacing a light –bulb (which cannot be replaced by staff under the PFI contracts) – and to take forever to do it as the various contractors and sub-contractors have to haggle over who has the right to do it.

Every school planned under the BSF programme is funded by PFI or PPP contracts (3) – (6). We should be welcoming the scrapping of this gravy train for the big firms who are the primary contractors in PFIs and PPPs and demanding that where the new government funds the building of new schools they from taxation or loans, either of which is much better value for money.

The question now is whether the Conservatives really cut the programme because it was bad value for money, or whether they’re planning to negotiate new ‘public private partnerships’ in which big firms’ donations go to Conservative party rather than Labour party funds in return for them getting to fleece taxpayers, including teachers and nurses.

If they’re really serious about saving on wasteful spending they could invest a bit in hiring lawyers and inspectors to look for breaches of contract in the short term in order to get us out of over-priced and under-performing PFI and PPP deals and save us a fortune in increased taxes and cut services in future.

(1) = Guardian 08 Jul 2010 ‘Public anger grows over scrapped school-building programme’

(2) = Herald (Glasgow) 08 July 2007 ‘School PPP scheme a 'catastrophe' for pupils’,

(3) = The PPP Journal, Issue 58, September 2007,

(4) = Guardian 27 Jan 2009 ‘Government may have to take on risk of PFI deals’, (covers BSF programme involving PFIs)

(5) = Balfour Beatty Press Release 21 Jun 2010 ‘Balfour Beatty appointed preferred bidder for £231 million Derby Building Schools for the Future project’,

(6) = European Services Strategy Unit,  ‘Building Schools for the Future’,

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