Schools Private Finance Illusion
Would you pay a mortgage
for 30 years, and then let the bank keep your
That, astonishingly, is what the public private
partnership (PPP) for Edinburgh's schools will
really mean. PPP and the Private Finance Initiative
(PFI) is not new money, it replaces public funding,
it costs more and it takes away our say over
The "partnership" is an illusion.
The council sells off our schools, pays huge
charges for 30 years for using them and, at
the end, the private sector still owns them.
The company can then name its price with no
competition. Partnership? More like being taken
to the cleaners.
The staff who look after the cleaning, safety
and security of our schools will be sold off
too. The history of PFI is that it cuts the
wages and conditions of low paid workers. Any
"savings" go to private profits, not
the council tax payer.
Private finance has its place. But not in direct
public services. There is a world of difference
between a venture like the Gyle or the conference
centre, and the future of our childrens education.
The private finance illusion is well documented
in the Health Service. In Barnet, a £60
million hospital using PFI will cost the taxpayer
£500 million over 30 years. The cost of
just preparing the bid for the new Edinburgh
Royal Infirmary was £3.4million, all to
get a 40% cut in beds!
The consultation is an illusion too. Councillor
Maginnis (City of Edinburgh Council Education
Convenor) tells us she is consulting widely
- first we knew! Parents and workers will only
be consulted after the decision is taken.
UNISON has been surprised at how little Edinburgh's
decision makers seem to know about the issue.
You only have to look at the council's own PPP
document alongside the claims of Councillor
Maginnis to see either misunderstanding or an
They claim it will
bring savings. Some savings will
come from closing schools. The council could
have done this anyway, but this
way it can blame the private sector. However,
we won't see the savings. "Any likely savings
from the project will be consumed by the private
sector charge for providing the facilities",
says the council's own report.
Fearing charges will be high, the council will
transfer "surplus properties" to the
private company to try to reduce the price.
"Refurbishments are less attractive to
the private sector", says the report (sorry,
we thought this was what it was all about) and
this would show up in the level of charges.
The long awaited upgrade to Drummond High is
described as having "low attraction"
to the private sector. Sorry, Councillor Maginnis,
it will not bring savings.
They claim the risks
transfer to the private sector...
The private sector will own the schools. Its
income from the council will be protected despite
government cuts. The risk stays with the council
which could face having to increase the council
tax or cut other services to ensure the private
firm gets its money.
If the private firm goes bust, the council
will have to pick up the tab. If it does not
deliver a service, the council remains liable.
If it does not get its money on time, the council
will have to pay penalties.
The banks (the main PFI backers) and the legislation
have ensured there is next to no risk. That
is why these projects are so attractive. They
make money, they are a monopoly and they are
secure. What risk there is, we pay for. As the
report says "the structural risk of refurbishment
is perceived to be much greater and this would
be reflected in the charge to the council".
Sorry Councillor Maginnis, the risk stays with
us and of course with the staff whose jobs,
wages and conditions will be under threat.
They say the council
will keep "complete control" over
the Education service... With no
new money and no control over buildings, the
only savings a cash-strapped council can make
are on direct education services. How long do
you think enhanced services and basics like
school meals will last under that system?
The janitor, cleaners and grounds maintenance
will all work for the private company. What
about vetting staff or dealing with problems?
There is no point complaining to the council,
they are not the employer.
The Head Teacher will have no control over
the building. Bureaucracy will blossom with
dockets flying around the school, the council
and the private company, before they get back
down to the jannie to change the light bulb!
Sorry Councillor Maginnis, we will have less
So why are they doing
this? Short-termism is the answer.
We might just get some better buildings now,
but we and our children will pay for years to
come - long after these politicians have gone.
They won't carry the can.
Our schools need real public investment. In
the rest of Europe, building and repairing with
public money is classed as an investment. Here,
the system calls it debt. That same system allows
the government to show receipts from privatisation
as income. A hint there as to future plans?
The private sector is not a public service.
Its first responsibility is to make a profit.
Private finance done this way simply means that
services will be defined on profitability, not
We are a wealthy country, surely we can do
better than selling of our schools and staff,
while paying through the nose for a generation
for the privilege.
And surely we can do better than the misleading
gloss our politicians are putting on this sell-off.
Let us have the real figures so we can judge.
Oops, sorry, you can't have them. They are secret
due to "commercial confidentiality".
You'll just have to trust the council when it
tells you the banks will give us something for
nothing. And we all believe that, don't we?
UNISON City of Edinburgh Branch