Slow start for business investment

29th September 1995 at 01:00
Education is lagging behind in the Government's private finance drive, reports Clare Dean. Education and Employment Secretary Gillian Shephard is to be questioned by the Treasury about the failure of her department to get businesses commercially involved in schools and colleges.

While company sponsorship schemes like the technology schools initiative have been relatively successful, Treasury sources revealed this week that the Department for Education and Employment had yet to register a single project under the Private Finance Initiative.

PFI was introduced by the Government in 1992 to promote partnership between public and private sectors and launched in education circles with a glossy DFEE brochure nearly six months ago.

Mrs Shephard said at the time that the opportunities for business and education to work together were greater than even before and added: "With public and private sectors working together, we can provide an even better education service."

With the squeeze on public-sector spending, she will now be under pressure to explain the apparent failure of the PFI in education.

In contrast to the DFEE, the Department for Transport has set up 380 PFI road projects including the Channel Tunnel link. The Home Office has several prison schemes and there are a number of Department for Health programmes.

Over the next two months ministers across all Whitehall departments will be asked by the Treasury to explain their progress and how they plan to take the initiative forward.

A spokeswoman at the DFEE admitted that no school had embarked on the PFI and said: "We are still not very far forward with it."

And Ian Langtry, education officer with the Association of County Councils, said: "The supposition seems to be that somehow the private sector will be inveigled into providing buildings for schools, but why should it?" The first movement on the PFI in education may come from colleges who will next week tout for Pounds 300 million from businesses at a PFI conference.

More than 450 colleges now have an urgent need for either new buildings or upgrading of their existing premises.

The Further Education Funding Council has produced a national register of colleges with building and modernisation projects suitable for development in partnership with the private sector.

It will host a conference in London next week to "explain the opportunities" in FE to bankers, investors, developers, major construction companies and their advisers.

But while colleges are desperate for money for building programmes, some are beginning to question the amount of time needed to prepare bids for the PFI.

Senior staff at one large Midlands college, including the vice-principal and the estates manager spent "hundreds of hours" preparing their bid for new buildings, according to a management source. "You have to question whether this amount of valuable and expensive time justifies the outcome."

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