Ngaio Crequer visits one institution which paid a high price.
"Whatever does not kill you makes you strong." That is how Patricia Morgan-Webb, principal and chief executive of Clarendon College, Nottingham, described her experience of the Private Finance Initiative.
The PFI has involved shared pain. It has been disruptive, time-consuming, and has incurred significant costs. For the past few months, she has spent 50 per cent of her own personal time on the project.
The college would not have started if it had known then what it knows now, she says.
Nevertheless, soon the results should be there for all to see. Clarendon is the largest college in the West Midlands and has achieved a 120 per cent growth in student numbers since incorporation. But its buildings were spread across the city, and it could not meet its student targets without more accommodation.
"We looked hard at the kind of place we wanted to be," said Ms Morgan-Webb. "We wanted to stay in the city centre. We needed a large building but there were no opportunities for new building."
So with the city council the college scoured the area and found the Adams Building, an old textile warehouse which was Grade Two listed. Based in the heart of the city's lace-making area, two-thirds of the building was occupied by tenants.
"Earlier this century it had been a significant provider of jobs but the area was now in decay and business had moved away. Here was an opportunity to create a new FE college and help in the regeneration of the Lace Market," she said.
It would cost Pounds 16.5 million to refurbish the building and provide 12,800 square metres of educational accommodation. For four years the plan has been worked and re-worked.
The college needed partners and found them: the city council, English Partnerships (to negotiate with the tenants), the government office for the regions, National Heritage, Regional Challenge (top-sliced European Regional Development Fund money to assist in the high cost of refurbishing a listed building), and the Lace Market Development Company.
The original idea was conceived before PFI, so the rules changed again and work began anew.
In November 1995, the college advertised in a European Union journal and there were 37 responses, eventually reduced to seven.
In June 1996, the FEFC issued its "in principle letter of support". Bidders were invited to submit their proposals, and in October the preferred bidder was appointed.
So what have they learned? Success can only be achieved if there is good teamwork between college managers, the professional advisers and the bidders. Do not underestimate the time, cost and effort involved. Every development is unique, so get professional advice early.
At Clarendon, contracts are due to be signed this month and in September 1998 the college hopes to occupy the revitalised Adams Building.