Have councils learned from first PPP schools?

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A MEMBER of an Edinburgh high school's Parent Teacher Association (PTA) put it succinctly. "There seems to have been a total loss of common sense and good will," she said as we tidied up after a fund-raising winter fair.

Our discussion focused on how our PTA event was now held in the morning instead of afternoon as a result of the school's refurbishment under a public private partnership (PPP) scheme. The school's "core hours", when the council has control over school lets, now end at 1pm on Saturday. After that a prohibitive commercial rent applies. Our fair's changed time-slot means lower attendance and less income. A football club that had previously used the school playing fields on Saturday afternoons was also forced to relocate.

It was to be the panacea for our crumbling schools: PPPs would turn run-down schools into superlative venues fit for the challenges of 21st-century education. Dreamed up by the Tories in 1992 - and enthusiastically adopted by New Labour - capital and competence from the private sector would marry with central government and local authorities to change the face of UK schools for the better.

Detractors, suspicious of collaboration with the profit-driven private sector, decried early Private Finance Initiatives (PFI) as "mortgaging the future". Trade unions predicted local authorities would be effectively handing control of school buildings to the private sector, dubbing it "privatisation by the back door".

Parents, pupils and school staff were, of course, never asked about the principles of PPP nor were they presented with any alternative. Furthermore, they were not consulted or informed about the consequences of rigid PPP contracts. Local authorities would say they were not given any choice either: the Scottish Executive presented PPPs as the only viable way to renew their school estate.

An Audit Scotland report in 2002 noted the selection of the PFI funding route had not been "a completely free choice" for local authorities. There were many strings attached: a rationalisation (closures and mergers) of schools and efficiency savings were preconditions. To cover rental payments due over 25-30 years, local authorities were incentivised, in effect, to "borrow" jointly with the PPP consortia, not necessarily from the more competitive open market.

Additional charges are made for non-contract services and facilities. This is the aspect that has had a negative impact on community and sports club users of schools. Twenty-nine of Scotland's 32 local authorities are now signed up for PPP school projects, all of which have to be approved by the Executive.

Over the last six years, the Executive has driven forward its PPP policy vigorously. Superficially, regular announcements of PPP finance offer impressive soundbites. The reality is that the Executive is only giving local authorities "permission to borrow" those sums with stringent conditions attached. The phrasing has been careful: "300 schools will be rebuilt or refurbished by 2009, representing an investment of 2.2 billion." Parents (voters) might believe this represents a huge governmental investment in education but it does not. Gordon Brown gets to keeps his public borrowing figures down and gains new school buildings in a kind of parallel universe of borrowing. This comes at a price to local government: the future has indeed been mortgaged.

An Audit Scotland report in 2002 warned that "to defray the PFI costs... councils need to identify new funding to pay for the new level of service... either reductions elsewhere or increased taxation". This may explain why many school grounds and open spaces are being redeveloped for housing. School campuses are being relocated into the green belt to free up valuable development land. Selling off the family silver is a one-way trip. If local authorities have underestimated the costs of the PPP borrowing, we are likely to see massive council tax hikes in future. If local authorities miscalculate their pupil roll predictions and they fall more than anticipated, there will be an additional disproportionate cost.

All contracts are deemed commercially sensitive and it is impossible to examine them. How then are we to measure whether this flagship government policy is a success? Is cost the only yardstick, when we have also witnessed an unhappy revolution in the ways schools connect with communities? The fundamental way we view provision of education as a public service, not as a profit-and-loss calculation, has been undermined. This change in ethos gives entirely the wrong message to pupils in PPP schools. No matter what the political spin, the central purpose of PPP schools is to make a profit for the contractors, not to educate children.

The Audit Scotland report stated definitively that "there was no evidence of PFI benefits to the operation of school facilities". Many of the front-line downsides are only now being made public as schools find their operations restricted or compromised. Kathleen Marshall, the children's commissioner, has reflected this growing disquiet.

Perhaps learning its lessons, the Executive seems to be moving away from restrictive PPP contracts. More flexible ways of procuring building work are being piloted, where profits of the schemes are shared. It will be interesting to see if the private sector is interested in a more consultative approach, which will have an impact on profit margins. The Executive issued guidance on capital injections into PPP schemes this month. This suggests PPP needs propping up.

As a new round of PPPs begins in Edinburgh, Ewan Aitken, the council leader, said Edinburgh has learned from the mistakes of its first phase of PPPs. Unfortunately, the recognition of previous failings does nothing to help a school tied into a contractual arrangement for 30 years.

While several schools now enjoy state-of-art facilities, there remains a significant problem about control and cost. In many PPP schools, only the contractor can carry out repairs and changes to the building, at an additional and inflated cost. The contractor has to agree to any alterations - no matter how minor.

At one Edinburgh secondary, pupils made noticeboards in design and technology class and installed them. This prompted a letter from the contractor claiming it was "an act of gross vandalism". Teachers are not allowed to alter heating settings in classrooms, and posters can only be put up on specified noticeboards.

In many cases, schools are unable to speak out publicly about the difficulties they face in negotiating with contractors, as this is a relationship that will have to be maintained for another three decades. The lack of openness and transparency about PPP arrangements is a major trust issue. The contract is used as a weapon or as an obstruction, to even the smallest request. Everything that does not feature in the contract - and contracts are not available for scrutiny - has to be negotiated hard, from installing lockers to erecting floodlights on school playing fields. It is a major diversion for head-teachers away from what they should be doing: providing education.

Overheating, poor or erratic maintenance and disputes over areas of responsibility are documented complaints. Canteens that are far too small - the Royal High School in Edinburgh has a pupil roll of 1,200 but can seat only 200 in its canteen - are another feature of the capital's first PPP scheme. The finger of blame for this oversight points at weak contracts that failed to reflect the needs of school communities and pupils. These contracts were based on Executive models driven by cost savings, not by service provision.

Fund-raising to improve school facilities is not the simple task it once was, as permission for improvements has to be sought from the contractor - and additional, inflated charges are made. Some of the goodwill in relations between all the stakeholders in schools has been lost. Why donate your time and energy to raise funds when they are going to disappear into the deep pockets of a contractor?


• Paramedics had to be called to Dunbar Grammar, right, after one of the teachers suffered an electric shock when he went to switch on a light. A fire inspector at the same school came out to do a risk assessment and said the lighting was inadequate outside the school and it failed to pass the necessary safety requirements.

• Teachers at one school were told to fill in a risk assessment form because they wanted to have a bar during a ceilidh. At another school, teachers were forced to fill in a form and ask permission to install a light bulb or noticeboard.

• A survey of teachers in 2004 found only 30 per cent believed PPP was value for money. It found many projects were beset with problems - including overheating classrooms, leaking roofs and lack of storage.

• Staff at St Roch's, Glasgow, had to cope with two years of building work. Pupils had to wear overcoats in class during winter months because the heating didn't work.

• The contractor for East Lothian's school PPP, Ballast, went into administration. It was months before Balfour Beattie took on the contract, which covered five schools - Ross High in Tranent, Musselburgh Grammar, North Berwick Academy, Dunbar Academy, Preston High in Prestonpans, and Knox Academy, Haddington.

At Musselburgh, sub-contractors threatened to repossess school equipment and the contents of the library were impounded due to unpaid bills. Pupils also raised concerns such as a faulty heating system, foul-smelling industrial bins and a lack of adequate toilets for female pupils.