Like many headteachers, Andy Schofield was delighted when his school was given the go-ahead for much-needed repair work.

The dodgy toilets, seven temporary classrooms and waterlogged playing fields would all become a thing of the past.

At the start of 2002, Brighton and Hove Council agreed a pound;35 million public finance initiative contract with building firm Jarvis to improve facilities at his and three other schools in the city. But just a few months later his delight has turned to frustration.

“It has been a catalogue of broken promises, amateurish work and condescending conversations with people who talk to you like an idiot. You would not have builders like this in your home,” he said.

A report by the public spending watchdog, published last week, suggests that Mr Schofield’s experience is not unusual. The report criticised PFI, the Government’s flagship private-sector building scheme, for poor-quality work and missed deadlines and said that it had failed to live up to ministers’ promise that it would save taxpayers money.

The Government’s response was that this was “old news”. Schools minister David Miliband said: “The Audit Commission’s report is based on very early examples of PFI. We have studied these schemes ourselves and put in place significant reforms of the procurement process to learn their lessons.”

True, the commission’s report only covered work completed before 2002, but Mr Schofield’s repairs began last year. In September he was forced to start the term a day late because promised work had not been completed. When the school did open, pupils had to use wooden toilets and, in Mr Schofield’s words, it “has been like a building site” up to Christmas.

There have also been repeated wrangles over the exact nature of the work to be carried out, and concerns over health and safety were so great that the council threatened to call in the Health and Safety Executive.

“Today was a classic example. I parked my car in the normal spot and returned later to find that it had been surrounded by scaffolding.”

He says that the need for him and senior staff to participate in endless meetings, combined with continual monitoring of the builders on-site, has had knock-on effects on the children.

“If you destabilise the top-end of the school that much you affect the core business of teaching pupils.”

Problems with PFI are now undermining the Government’s record on school repairs which had been considered one of its major successes.

When Labour came to power in 1997 promising to tackle a pound;3 billion backlog of school repairs, few of their most optimistic supporters would have imagined that just five years later they would have increased annual spending on buildings by more than pound;6bn.

PFI has played a large part. This year, a quarter of the total capital funding for schools was in PFI credits. There are now 48 PFI contracts covering 550 schools with a total capital value of pound;1.3bn.

The sheer scale of the investment and the dire need for it meant that many schools were more than happy to sign up for PFI contracts, despite the fact that it would tie them into working with the same company for up to 30 years.

Certainly many schools have reason to feel grateful. After the early gimmicks such as replacing outside toilets, thousands of schools have had leaking roofs fixed, portable classrooms replaced or dodgy boilers repaired. The lucky ones have had their crumbling Victorian edifices replaced by new buildings.

Four out of five teachers and pupils surveyed by the Audit Commission were happy with their new buildings.

“I do not recognise all the negativity there is about PFI. I got the school of my dreams really,” said Heather Jones, head of Yardley school in Birmingham.

The school’s design is based on a shopping mall with a large atrium in the centre with different, distinctly decorated subject areas branching off it.

“I was asked for my vision right at the beginning and was involved all the way through,” she added.

But bad publicity about the scheme will not go away. Projects in Glasgow, Sheffield, Tower Hamlets, Liverpool, Haringey and Falkirk are among those which have hit the headlines for all the wrong reasons. Two years ago WS Atkins, one of the leading private contractors participating in the scheme, was fined pound;20,000 for failing to identify and properly deal with asbestos in Dursley primary in Gloucestershire.

The Commission for Architecture and the Built Environment, a Treasury-funded design body, has warned that some buildings could last less than 20 years.

Concerns have also been raised about the practice of contractors building on playing fields to allow the existing school to continue operating. And PFI contractors have been accused of doing the legal minimum to make schools usable by pupils with disabilities.

While opponents will say that PFI is inherently a scheme which puts the profit motive into conflict with the public sector, more prosaic factors may also be at work.

Companies complain of a shortage of skilled construction workers and lack of communication between LEAs and schools over exactly what has been agreed. Patrick Gardiner, managing director of Jarvis projects, said: “The skills shortage is a big problem. We suffered particularly in Huddersfield, Liverpool and also in Brighton.

“We actually imported floor layers from London to Liverpool to get the work done.”

He argues that there is a public sector mentality which looks towards pushing down initial costs to get projects off the ground, deferring the question of gaining additional funds until later on.

Mr Gardiner also points to constant pressure on firms to cut what is on offer to reduce the “affordability gap” between the work that is needed and the money available.

But while he says this puts pressure on contractors to cut corners, others say local authorities and schools are missing out because the public sector lacks the expertise to negotiate a good deal from companies.

One headteacher who wished to remain anonymous said that his LEA had been “outclassed” in negotiations. It is a view shared by Graham Lane, chair of education at the Local Government Association.

“We do not have the know-how to compete with big multi-national corporations. Even big counties struggle to strike a good deal for their schools.”

He suggests that local authorities should work together to create a national team which could work out PFI contracts on behalf of individual councils.

This mismatch in negotiating power is, as the Commission points out, made worse by the fact that for many schools and LEAs, PFI is the only way they can hope to secure funding.

But ministers are determined to press ahead as PFI remains a better option than funding building through higher taxes.

But unless a solution can be found, many more heads will experience problems similar to Mr Schofield’s, who says: “At the time I would have said that previous building work was quite good, but looking back now it seems fantastic.”