PRIVATE PUBLIC PARTNERSHIPS

IN SCHOOL MAINTENANCE

THE FAILURE OF THE ENGLISH VERSION (PRIVATE FINANCE INITIATIVE) FOR PUBLIC EDUCATION.

School Principals, School Councillors parents, teachers and pupils in our Victorian Public Education system are keeping a watchful eye of Victorian Treasurer John Brumby as he promotes "public private partnerships" in the transport, public building, court building and provision of basic services areas. Our own breed of "Blairites" , or are they Thatcherites, have been making noises about contracting our public schools maintenance etc. to private "partnerships".

We all know from bitter experience that decentralisation in our public system has led to decentralisation of financial responsibilities down the line to school councils and parents! Treasurer Brumby, in response to teacher union and parent organisation pressure has kept his  public/private partnership plans out of the media, but what is really happening.

Public School Supporters Beware. Premier Bracks and another Minister are in England at the moment looking at Blair country.

For your information we refer you to the  Guardian article entitled "A Costly Free Lunch " dated 30 July 2002. The following excerpts are instructive - and very worrying.

The article deals with a disastrous private finance deal in Haringey in the north of London. As Melanie McFadyean and David Rowland reported:

"...the UK's school buildings are in dire need of major refurbishment. The government is determined that the PRIVATE FINANCE INITIATIVE (PFI) should be the main source of financing available to local councils to upgrade their dilapidated schools. But PFI schemes can be expensive and problematic as school governors and the LEA in the north London borough of Haringey are finding out.

Having signed up to a 30-year PFI contract for the refurbishment and operation of nine of the borough's secondary schools, the schools and the LEA now find themselves short of more than the six million pounds sterling needed to complete the work the PFI deal was supposed to cover.

Under a PFI deal, the local council signs a contract with a private consortium to finance, refurbish, maintain and operate school buildings for a period upwards of 25 years. But private finance is a debt and not a new source of funding. Annual debt repayments are made over the lifetime of the project and, while central government provides a major proportion of the annual payments to the consortium in the form of "PFI credits", the local council must make yearly contributions as well.

School governors, who control their school budgets, also have to make annual payments to the consortium for services such as cleaning and caretaking, and so have the power of veto over whether a PFI scheme goes ahead. ...

Turning over the maintenance and running of their school buildings to a for-profit consortium for 25 years caused many governors serious concern and, according to the council of Haringey school and college governing bodies, many were "vehemently opposed to the scheme" when the plan was first announced. Up until the contract was signed, the governors questioned the wisdom of using PFI over a traditional refurbishment scheme that would be financed and run directly by the LEA. They were also concerned about any additional costs which PFI would bring.

But not signing up was never really an option ! Not only were Haringey's schools in a state of disrepair but the borough needed to plan for an extra 1,400 pupils over the next 20 years. Those schools that had initially voted against the proposals were wooed- in the case of one school by the promise of a new sports hall. Others who held out against the deal were offered enhanced packages and state-of-the-art facilities to get them on side.

But some schools were more intransigent than others. In one school that had voted four times against the PFI scheme, it took an "emergency extraordinary governors' meeting" called by the head to reverse their previously stated opposition. Eventually, with the nine secondary school governors' reluctant support, the LEA entered into a 95 million pounds sterling contract with a consortium headed by the construction company Jarvis."

The Haringey PFI scheme was a "flagship" scheme". In Victoria we have become used to "lighthouse" and "pilot" schemes! Senior officials from the Treasury and Education Ministry were involved. The School councils were assured that they would not and could not lose out financially! They were assured that this scheme was "the closest thing to a free lunch.." But what happened?  State school parents in Victoria will recognise the experience of "shortfalls" and "hard decisions" when reality bites.

"..It become apparent that central government's PFI "credits" would cover only part of the cost of the annual (debt) repayments to Jarvis (the private financial provider) The shortfall would have to be met from the council's own resources over the life of the contract. By the time the contract was finally signed the council had agreed to find an extra 2 million pounds sterling a year for most of the 25 years of the contract from its own resources. On this basis the council leadership was able to declare in October 2000 that 'the contract as negotiated is affordable to the council'

But it now transpires that the council and the schools have signed up to a refurbishment scheme that doesn't include 'furniture and equipment', 'complete access for wheelchair users,' or 'comprehensive cabling and IT provision.' Moreover, the council made no provision for the costs of emptying the classrooms, or storing their equipment and replacing it after refurbishment.

Leaving out such essential items seems a gross oversight but, according to the minutes of a recent council meeting, the DfES and the Treasury actually advised councillors to exclude these items from the contract to make it "affordable". In other words, the Treasury wanted to limit the amount it was prepared to pay for the project, leaving substantial liabilities with Haringey.

Victorian public school administrators can only identify. How many "global budgets" can cover all the maintenance etc costs, let alone computer and staffing costs? How longingly they look at the public billions going into well heeled private sector !

But the English story gets worse...

In Haringey those opposed to the use of the PFI were accused of putting ideology before the needs of the children. But it now turns out that the economic irrationalist ideology have led them into an economic morass.

The additional costs now amount to around 6.25 millions sterling of which the LEA and schools between them have found only 1.75 millions pound sterling.

Because of the shortfalls, the Local Education Authorities, forced to keep up payments to the private finance providers, (corporate welfare at the cost of children's educational opportunities?!) are planning to take hundreds of thousands of pounds sterling from the budget for the borough's primary and special schools. Some secondary school governing bodies are having to borrow from the LEA itself over the next four years in order to help plug the funding gap.

Unfortunately for Australia, our politicians tend to imitate English and American disasters long after they have been proved to be such disasters. The one thing Australia did in the halcyon days when we led the world, was to ensure all children gained an education through a publicly funded centralised public education system - without the leaking sieve of State Aid for the private church school sector.

When will we ever learn?

More information can be gained from either the Guardian website at http://education.guardian.co.uk/schools/story/0,5500,765104,00.html

or

PFI v Democracy, School Governors and the Haringey School PFI Scheme, " a report by Melanie McFadyean and David Rowland, Menard Press .Cost : 5 pounds sterling including packing and postage. Copies can be obtained from The Joseph Rowntree Reform Trust Ltd, The Garden House, Water End, York, YO30 6WO.