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Public cost of private finance

Audit Commission calls for local councils to be allowed to find other ways to fund new schools as quality of PFI buildings are criticised. Jon Slater reports

THE GOVERNMENT'S controversial private-sector building scheme has resulted in poor quality new schools and has not saved the taxpayer money, according to a new report from the public-spending watchdog.

The private finance initiative has so far failed to deliver promised innovation and the scheme is yet to "come of age", the Audit Commission's report says.

It calls on ministers to open up PFI to competition by allowing local education authorities to use other methods to pay for building work and for schools to be given a greater involvement at crucial stages of projects.

PFI in schools, published this week, examines the experience of 17 schools whose building work was completed by the end of 2001.

Under PFI, contractors are responsible not only for building work but also for maintenance and management of the buildings for a period of 25 to 30 years.

Unions and those on the left of the Labour party have attacked the scheme as privatisation by the back door but, despite vocal opposition at last year's Labour conference, the Government is determined to press ahead with the scheme.

This year PFI will account for a quarter of all spending on school building work. The report compares the quality of new PFI buildings with those funded through traditional routes. All schools fell below best practice but those built using PFI were found to be "significantly" worse on four out of five measures.

Common problems include classroom size, storage space and heating and ventilation. Some schools also complained that equipment provided by their contractor was out of date.

In one PFI school, low windows meant that sunlight failed to reach 85 per cent of the hall. In the summer, hot air was trapped and acted as an unwanted heat source.

A survey of staff and pupils at eight PFI schools found that although four out of five were satisfied with their new buildings - a finding that the commission says is not surprising given the state of many old schools - but that many had concerns about their suitability for pupils with impaired hearing or sight.

It is a concern shared by disability groups. The Disability Rights Commission told The TES that it has been warned that PFI contractors are doing the "bare minimum" to improve disabled access.

The Audit Commission also calls into question ministers' claims that PFI provides better value for money. Local authorities have to show that PFI is cheaper than other procurement methods in order to receive funding.

But the watchdog warns that LEAs have an incentive to over-estimate the cost of non-PFI alternatives in order to get PFI schemes approved because they have little prospect of securing other means of funding.

Dave Prentis, general secretary of the public-sector union Unison, said the report showed the need for an independent inquiry into PFI - a call backed by the National Union of Teachers.

Schools minister David Miliband said: "The report is based on very early examples of PFI. We have studied these schemes ourselves and put in place significant reforms of the procurement process to learn their lessons."

Jon Rouse, chief executive of the Treasury-funded Commission for Architecture and the Built Environment, said it was working with the DfES on the PFI schemes to "learn from mistakes made in the recent past".

"We are well aware that many schools, particularly those procured through PFI have been failing to make the grade," he said.

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