Council claims short-changing by Executive

Less than a week after the First Minister set out to encourage more local authorities to take up school rebuilding programmes using private finance, The TESS can reveal that the council which includes Jack McConnell's own constituency is involved in an embarrassing dispute with his officials about the amount of money it has received for school schemes to be built under public private partnerships (PPP).

North Lanarkshire Council is challenging the Scottish Executive's calculations which led to the authority being awarded pound;125 million of PPP funding, having bid for pound;237m. It claims it now faces an pound;8-pound;9m shortfall in the funding required to upgrade its schools.

At the beginning of the last bidding round, North Lanarkshire's estimated upgrading costs on the basis of need amounted to pound;300m. The authority indicated that, provided the Executive came up with the full amount necessary, this was its preferred figure. But, it added, if the council was required to find 20 per cent of the allocated grant, its bid would be pound;237m.

Most authorities were then offered 54 per cent of their bids. In North Lanarkshire's case this amounted to pound;125m. Michael O'Neill, the director of education, said the council reckons the Executive applied the 54 per cent calculation to the lower figure and not to the pound;300m that the council actually needed.

Mr O'Neill said the council was also disappointed by the amount it was offered in comparison with other authorities. Charles Gray, education convener in North Lanarkshire, expressed surprise that the council, as the second most deprived authority in the country, received pound;25m less than its neighbour, South Lanarkshire. The Executive will doubtless point out, however, that South Lanarkshire had submitted a higher bid of pound;297m.

North Lanarkshire's chief executive has now written to the Executive pointing out "the potential for miscalculation" and seeking to verify the figures. Mr O'Neill said: "The council's view is that it has possibly been short-changed by the Executive to the tune of between pound;8m-pound;9m."

He also indicated that the council would be submitting a bid for more funds from the next tranche of PPP bids for projects not accepted in the first round.

The Executive launched ambitious plans in June for a pound;1.15 billion programme under PPP which would rebuild or renew around 300 schools in 15 authorities. The deadline for the next round is September, although Nicol Stephen, the Deputy Education Minister, has made clear this is not an inflexible timescale.

Mr McConnell made his comments about encouraging more councils to get involved in PPP schemes during a visit to West Dunbartonshire Council where a ruling coalition of SNP, Independent and Scottish Socialist Party councillors has rejected PPP. He hinted that additional funds might be available to "persuade" them.

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