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CBI doubts on school borrowing

The CBI in Scotland says it is "sceptical" about the use of private funds to build new schools and other public projects, although it supports the principle of the Government's private finance initiative (PFI).

Iain MacMillan, director of the employers' organisation in Scotland, said the the initiative should not be a replacement for public expenditure. "We are concerned that the Government is using the PFI to get out of its commitments to providing infrastructural and other projects which should properly be the responsibility of government," Mr MacMillan commented.

The scheme involves the private sector building, owning and operating public sector projects, receiving a payback in the form of rental from local authorities and others. The only educational project accepted by the Scottish Office so far is the building of a new further education centre in Stirling, a joint venture involving Clackmannan and Falkirk colleges.

The Western Isles Council, whose capital consent from the Scottish Office is just Pounds 1.8 million, says it is exploring the possibility of using the PFI to build three new schools in Lewis at a total cost of Pounds 15 million. This would involve the closure of two secondaries and eight primaries.

Highland, with a Government allocation of just over Pounds 3 million for educational buildings, says it is at the exploratory stage but has no specific school in mind. There have been suggestions of a new PFI-built Pounds 12 million Portree High on Skye.

The new Stirling council has said it is considering the initiative to replace Balfron High. South of the border the Government is considering using the new Pounds 40 million Schools Renewal Challenge Fund, part of the PFI, to pay for urgent health and safety work.

Unions have condemned the move and education authorities fear the fund will lead to cuts in Government support.

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