A Brighton secondary school has been offered pound;100,000 in compensation by its local council after problems with a PFI contract to refurbish its buildings.
Andy Schofield, headteacher of Varndean school, said the pound;150 million scheme to rebuild four secondary schools was a "rip-off". He has referred a damning report commissioned by the LEA on Jarvis, the contractor, to the Audit Commission.
Mr Schofield has also lodged a complaint that the Brighton PFI was a "clear misuse of public funds". "The public sector is being ripped off despite a huge investment in time and money from the school and council," he said.
"The council has a contract with Jarvis, Jarvis do not deliver it and yet because no one has monitored their performance, we end up paying again.
Where is the logic in that?"
Brighton and Hove city council said it cannot take action against Jarvis because the terms of the contract were not specific enough.
Jarvis won the 25-year contract in early 2002 to refurbish four secondary schools. The company was also to manage the facilities, which included the catering, cleaning and security.
However, the council called in consultants last summer after schools repeatedly complained of bungled building work and poor site management.
Varndean said Jarvis failed to provide equipment and furniture for dance and sound studios.
The report, out this month, shows that Jarvis failed to meet eight out of 11 benchmarks, failing in key areas such as health and safety. The author, Lori Keating, a consultant commissioned by the LEA, said: "We found significant problems with most systems in use by Jarvis Accommodation Systems. Our health and safety concerns are wider ..."
Although the report promised to "apply a deduction", or financial penalty, against Jarvis, the council said it would not be taking action.
David Hawker, Brighton's director of children, families and schools, said: "There is a deeper question of how you can avoid placing a PFI contract with an organisation that has deliberately undercosted it in order to get the contract, which is what Jarvis did." Mr Hawker said that the council was working to ensure that Jarvis met its contract terms and planned to fine it if it did not.
Although Jarvis subsidiaries are still sub-contracted to provide the building and facilities management, the parent company sold out its shares in the holding company to investment vehicle SMIF. Brian Semple, from SMIF, said: "What the report identified was that the processes for monitoring were not in place. These issues are now being sorted out."