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Private cash to fund six schools

PFI deals are costly and bureaucratic, but ministers want more of them. Karen Thornton reports

WORK STARTS this month on two new primary schools in Education Secretary David Blunkett's home city of Sheffield.

Nothing too unusual about that - schools are being built all over the country. Except that Owler Brook and Mosborough primaries are part of one of the biggest deals so far signed with the private sector to deliver capital works for a group of schools.

Sheffield's pound;49 million Private Finance Initiative deal - covering six schools - is the only one of five similar pilot projects to have reached contract stage.

The five - given initial government approval in 1998 - received a grant of pound;200,000 each from the New Deal for Schools fund to cover the additional consultancy costs (legal, accountancy, architecture) involved in agreeing multi-site contracts.

In a separate deal, Sheffield has won a further pound;30 million in private-finance credits from the Government in order to rebuild another two secondary schools. An pound;80m Birmingham scheme to rebuild 10 schools is the largest private-finance project to date in England, but is dwarfed by Glasgow's pound;220m refurbishment of all its 29 secondary schools.

While the Sheffield deal is the only one of the group-school pilots to have been finalised, a project to repair, refurbish and operate 20 schools in Kirklees is understood to be close to being signed.

A Department for Education and Employment spokesman said that no time limit had been set on getting the pilot projects through, although the New Deal for Schools money has to be spent by2002.

PFI money now makes up a significant proportion of the Government's capital investment in education - with pound;350m of credits in the current financial year, and pound;450m allocated for 2001-02.

The Sheffield scheme is the 19th public-private partnership deal to be signed, but 30 more are being negotiated. Ministers claim that more than 600 schools will be rebuilt, repaired or modernised as a result of PFI.

But the complexity of deals which leave private companies in charge of managing school maintenance and repairs for up to 25 years can lead to long negotiations.

One of the previous Conservative government's pathfinding private-finance projects, at Pimlico school in Westminster, London, has still to be finalised after more than four years' work.

David Taylor, Sheffield's head of planning and premises, seconded from the DFEE, conceded that the new schools could have been built faster with a straightforward capital grant. But PFI is the only source of funding for such big capital projects, and several million pounds will be saved over the life of the contract.

But unions such as Unison - which represents public-sector staff, including caretakers and cleaners who find their jobs transferred to the private sector under PFI deals - remain concerned about the long-term value of the initiative.

"People are going to have to pay for it for a lot longer than if the local authority had paid for it. The level of consultation is sometimes very poor, and people seem to forget that support staff are affected by this," said Christina McAnea, Unison's national schools officer.

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