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Doubts over finance initiative

BUILDING and refurbishing schools with private-sector cash is proving costlier than expected, academics have warned, write Warwick Mansell and Karen Thornton.

Research for public-sector union Unison casts doubts over the policy of getting businesses to fund public building projects via the Private Finance Initiative.

It found Haringey Council, north London, underestimated by pound;12 million the funding required for a PFI project to build a new comprehensive and refurbish eight schools, forcing cuts throughout the council as it sought to fund the shortfall.

The research, by academics at University College London, warned that similar problems could afflict many schools' PFI projects in the future.

Professor Allyson Pollock of UCL said: "Local authorities and schools are signing up to these deals without thinking through the real revenue consequences."

Six "PFI" schools are up and running alongside contracts fo catering in Lewisham and information technology in Dudley. Schemes for 600 more schools are in the pipeline.

Chris Mason, head of the first school rebuilt using PFI - Sir John Colfox in Bridport, Dorset - remains an enthusiast for the scheme, even though it has left the school with a budget shortfall of pound;6,000 a year.

His enthusiasm is echoed by Sue Roach, head of Victoria Dock primary in Hull, which opened in 1999. She said: "It's been the best thing that ever happened. We have the most beautiful new building, maintained to the highest standards. Staff get a lift just walking through the door."

In Lewisham, a PFI scheme has led to a pound;4.2m investment in kitchens and an end to primaries having meals cooked elsewhere. Mary Mann, the council's contract manager, said: "The question is not if this is best value. The important thing is we got an investment up-front which we wouldn't have got any other way."

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