The SNP-led Falkirk Council has been forced to ditch its plans to rebuild schools under a not for profit trust after the Scottish Executive refused funding.
The authority is instead to emulate Argyll and Bute, Clackmannanshire, Angus and Aberdeen in opting for a non-profit distributing organisation (NPDO), which officials say differs substantially from the more common public private partnership (PPP). An NPDO pays no dividend to shareholders, redistributes any surpluses to education and retains independent directors on the board.
Under a Labour administration, the authority was the first to rebuild secondaries under PPP. Now officials concede: "The reality is that notwithstanding its advantages, the Executive will simply not fund the trust model."
Both finance and construction companies are said to favour traditional PPP contracts.
Falkirk officials believe their revamped model is likely to be accepted by ministers and that cluster arrangement with other authorities may bring benefits.