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Councils back away from PPP

FALKIRK, the first council to open a batch of five public private partnership secondaries, has turned to a not-for-profit trust in its plans for a second round of school rebuilding.

A change in control from Labour to the SNP has sparked the reversal, although the council could yet table a dual PPP not-for-profit bid to the Scottish Executive by the end of September.

West Dunbartonshire, a coalition of the SNP, Independent Labour and Scottish Socialists, this week intensified the opposition to PPP by refusing to submit any bid for PPP cash.

Danny McCafferty, council leader and former education convener of the Convention of Scottish Local Authorities, said: "We want to consider other options, for example, the option of a public trust fund such as was recently conceded to the prison service."

Falkirk accepts the SNP policy is "novel and unproved" and states that "considerable work is still required on a number of fronts to ensure the model's viability and robustness". The trust would be based on a company limited by guarantee but officials say they are still investigating potential tax and operational difficulties.

The council wants to rebuild Denny High, refurbish another three high schools at Falkirk, St Mungo's and Grangemouth and build two new primaries at Maddiston and North Larbert in a pound;64.5 million capital project.

Under the not-for-profit model, the council would mandate a company - probably a mainstream bank - to design, build and service the new schools. "The Scottish Executive has indicated that responsibility for maintenance of the school buildings will require to be placed with an external provider," officials note.

The authority would grant long leases on the school sites to the company at nominal rents and then lease the sites back. Falkirk would use government grant to pay off the costs of refurbishment, rent and services.

The advantages, it says, would be greater community and stakeholder involvement, the retention of profit within the state system and possibly more flexible working arrangements during the project because of the closer links between the council and company.

If the rebuilding programme was to continue under PPP, it would prefer catering and some janitorial services to be kept in-house.

Meanwhile, West Dunbartonshire says a wide consultation found strong opposition to PPP schemes. Mr McCafferty said: "It is not a matter of pride, but of regret, that we are having to tell the Executive what people think.

"They should know that PPP is unpopular. Best value depends on having options but when councils are being told that PPP is the only method of funding the Executive is prepared to consider, that is a monopoly, and a monopoly is not best value."

Councils are still waiting to hear if their bids for the next round of PPP rebuilding cash of up to pound;500 million have been accepted by ministers. A decision expected last month has been delayed.

Leader, page 18

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