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NAS backs private cash for schools

Labour's disputed plans to repair and rebuild dilapidated schools with private sector funding won outline support this week from the National Association of Schoolmasters Union of Woman Teachers at its conference in Glasgow.

A move to oppose what a London delegate labelled a "loony Labour plan" was heavily defeated. Had the motion been carried it would have been a severe embarrassment for the union, due to be addressed yesterday (Thursday) by David Blunkett, Labour's shadow Education Secretary.

Mr Blunkett this week surprised many of the party faithful by pledging Labour to a massive programme of repairs funded by the banks and other financial institutions. Critics suggested he was replicating Tory policy and predicted the move would have little credibility in many parts of the country.

Helen Liddell, Labour's spokeswoman on Scottish education, has confirmed that the initiative would apply north of the border.

Jim O'Neill, the association's Scottish official and a Labour councillor in East Ayrshire, said the union had to consider any source of funds.

"We are more concerned about the physical state of schools rather than where we get money to repair them. We have a desperate situation and there are some schools in Scotland where it is physically dangerous. We also need to look at security after Dunblane," Mr O'Neill said.

He argued that with the two major political parties now committed to greater involvement from the private sector it was realistic to accept that route for funding the backlog of repairs. East Ayrshire's capital budget for all services was Pounds 1.6 million and education alone was responsible for 61 schools.

"Because of the low capital budgets, this could be the only way to access funds but it has got to be done very carefully," Mr O'Neill said. "The essential thing is control. Local authorities have to retain control of public facilities."

He understood that Labour's version of the Government's private finance initiative depended on groups of schools or local authorities paying for capital projects through revenue budgets, without affecting public borrowing. Councils already fund minor repairs through such a mechanism.

"The problem," Mr O'Neill observed, "is funding for substantial capital works. For example, for buildings that are falling down."

Mr Blunkett, speaking to the press earlier this week, confirmed the accounting trick: "The whole thrust of this scheme is to avoid capital sums falling against the public sector borrowing requirement. We have got to find a way around it."

He believed his scheme, already discussed with Hambros, the merchant bank, was practical. Schools would agree contracts with a consortium of lenders to refurbish facilities and maintain them over a period of about 20 years. The consortium would be repaid using existing money allocated to schools for capital repairs.

Labour authorities south of the border believe the scheme will allow councils or groups of schools to substantially increase their borrowing limits and to tap unspent funds tied up in budgets controlled by individual schools.

Judith Gillespie, convener of the Scottish Parent Teacher Council, said Conservative and Labour schemes were both devices to place capital projects outside borrowing limits set by Government.

Mrs Gillespie warned: "The private sector will be attracted to schemes where there is money to be made. There are lots of areas where there is no profit to be made. Where there is risk, it is likely private firm will require the authority to share that risk and contribute some of their public capital. "

The council, however, has consistently highlighted the crisis over shoddy school buildings, and Mrs Gillespie argues that major investment would have a knock-on effect for the whole economy.

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