The bridge to nowhere and other PFI gaffes

11th May 2007 at 01:00
Heads say steep rises in management fees will put pupils' education in jeopardy.

HUNDREDS OF new schools, built and managed by private finance firms, are being hit by big rises in management fees that headteachers say will jeopardise pupils' education.

Some London schools were told last week they must pay 25 per cent more to private finance initiative companies for fees on cleaning and grounds contracts.

Others around England and Wales were notified this week of similar fee increases when they have work done on their school buildings. Heads say the increased fees will cost them thousands of pounds that will have to be cut from elsewhere in their budgets.

Chris Montacute, head at the 1,600-pupil Wootton Bassett school in Wiltshire, said the fee increase was a considerable concern: "I will work very hard to stop this affecting teaching and learning, but it may put pressure on support services budgets," he said.

Investigations by The TES and a report by the Association of School and College Leaders reveal a litany of complaints about the construction and management of schools built in private finance initiatives. Examples include:

* Land Securities Trillium, a big property management firm, has paid Brighton and Hove council more than pound;500,000 compensation in a previously confidential settlement for inadequate services provided by its predecessor, Jarvis, to three schools the private finance company owns and manages.

* Waltham Forest in north-east London confirms it is working to address concerns about the performance of its PFI contractor, part of the pound;1.6 billion Kier construction group.

* Caretakers elsewhere have refused to change the tanks on water coolers or clean up after a sick child, citing private companies' health and safety guidelines.

* Some facilities managers will not approve minor work, such as siting wastepaper bins without head office approval.

* An entire middle school in Newcastle upon Tyne was mothballed shortly after being built, but the city council continued paying a private company Pounds 52,000 a month to clean and heat the empty buildings.

The DfES has agreed to look into concerns about expensive, and time-consuming PFIs.

"They were meant to free up the leadership teams to deal with teaching and learning," said Malcolm Trobe, association president. "Instead, all the time is devoted to arguments about getting things done."

The union's report, made public today, criticises the takeover of school PFI contracts by increasingly large national or multinational firms, saying they place far greater emphasis on profit margins.

Through a series of corporate takeovers and mergers, one enormous property company, Land Securities Trillium, now owns 25-year PFI contracts for 150 schools. They include schools originally built by Investors in Education, WHEP, SMIF and Jarvis.

Land Securities Group, a publicly listed London company that describes itself as the fifth largest property company in the world, has acquired school grounds and buildings with a pound;1.9 billion replacement value.

While some headteachers said they had developed good relationships with their private partners, many expressed growing unease about the way their schools' ownership and management had been taken over by increasingly large and distant corporates. Andrew Williams, a school bursar, was so enthusiastic about his experience planning a new PFI school that he took a job as facilities manager with the management company Mitie, which is part of a consortium that owns and runs five schools in the London boroughs of Ealing and Camden.

A year later, in 2005, he had found the conflict between the needs of the schools and the needs of the private consortiums so difficult to reconcile that he resigned.

"Because my background was education and I could see the impact on teaching of things going wrong, it was difficult for me," he told The TES this week.

He said conflicts arose over heating, cleaning, poor dining room layouts, and the PFI owners renting out school facilities to other users.

Mitie PFI is facilities manager of 85 schools. Michael Woodhead, managing director, said the problems with cleaning times at the London schools had been only in the initial stages, and the other concerns were all design matters.

Mr Williams believes PFIs could still be the best way to build new state schools but schools and contractors needed to learn the full implications of partnership and train themselves to understand their partner's expectations.

The DfES insisted schools were protected. A spokesman said all PFI contractors were expected to deliver excellent service to schools, and value for money for the taxpayer. Contractors were heavily penalised for their failings and could not arbitrarily raise fees, he added. That meant most of the 843 PFI school partnerships had been successful.

Barry Williams of Land Securities Trillium, said children's education was as important to the company as returning dividends to its shareholders.

"We need to make the partnerships work, to make the economics work," he said.

Fee increases were necessary, because for the first five years of PFIs, Trillium and its predecessors had been tied into unaffordable contracts that did not account for rising costs like labour.

He said the company's increase in its management fees this week - from 10 per cent to 15.5 per cent of the cost of any work that had to be done to vary the school's design - was in line with new government standards issued with the Budget.

But Joan McVittie, the headteacher at Woodside high school in Haringey, north London, said Trillium had already increased her cleaning and grounds management fees by 25 per cent to pound;75,000 this year.

Increased maintenance fees would push the total to pound;431,000, she said, while the roof of her new building still leaked, it took nine months to get water fountains installed, and last week a classroom window simply fell out.

She said that she grew tired of waiting for the private management company to do repairs, so she and her leadership team spent three days over Easter repainting the "absolutely disgusting" toilet block.

Asked about complaints from the Haringey and Brighton schools, Barry Williams, of Trillium, said there were often misunderstandings between schools and local authorities about getting work done. "We are being relatively proactive about trying to find solutions, more proactive than most PFI players," he said.

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