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16 October 2014

Peatstack


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Schools Closure Update

The Peatstack would like to add a little clarity to some of the financial matters referred to in earlier posts about the proposed closure of the S1/2 units in our local schools.
Namely, that the Comhairle's PPP (Private Public Partnership) for school development is in many ways a more acceptable hybrid version of the common private finance models used elsewhere, involving the Comhairle actually setting up and owning a private company (Western Isles Schools Project or WISP), and is not therefore the usual userous private profit type company.
At least the people of the Western Isles might, in theory actually own this company itself.
The Company will, The Peatstack understands, be set up to develop the schools project and the various contracts involved, and then oversee the on-going management of the newly developed schools. The finance for this will not be coming from private sources but from the Treasury's Public Works Board at a largely acceptable interest rate - but that is only for the capital costs, and not the on-going management costs of the new facilities.
Faithful & Gould/Navigant are contracted to develop this project and to obtain best cost for contracts etc. At what cost, I ask?
Now, please do accuse the Peatstack of being naive in being a little less against this hybrid model than the full-blown private finance schemes used elsewhere. If all of this is just the Comhairle window-dressing the same bad finance deal, then do let me know, but as it stands I feel we should focus on the real cost of the on-going management of these new facilities which will envitably be run by a private contractor.
However, the Devil as they say, is in the detail. For whilst the finance might be, in the round, on more beneficial terms, part of the on-going cost of the schools development will be for what is referred to in the WISP Development Plan as a contract for 'facilities management' of the new schools. Namely, the privatisation of schools maintenance etc.
So, whilst the Peatstack hopes he is right about the hybrid financial model being less onorous than the usual private sector finance model, I shudder to think what the spend will be on a private company running 'facilities management' on behalf of the Comhairle. No one does that for charity, so the costs of that contract could be very high.
This contract will, I am sure, cost lots of money and jobs, for there will be no hybrid model available in awarding and paying for such a private sector contract. Elsewhere, in parts where such management contracts operate, teachers have complained about having to ring a call centre in some remote place in order to arrange for a light bulb to be changed. (Yes, this is the kind of real complaint that can be sourced on the credible websites of the main trade unions etc.)
So what is the truth here? How much is this contract going to be for? What's the profit margin of the contractor going to be (all of it from council tax payers money and the already stretched education budget)? and do we want our S1/2 units instead of a tidy profit for the contractor?

Posted on Peatstack at 18:58

Comments

i thought we kicked thatcher out years ago for this very reason, privatising everything and ruining everything that was in place and running smoothly. When are these people ever going to learn and look past the £ signs in a realistic manner....they say they can't afford to run the schools but they can afford to pay a whole new set of management and other rubbish that isn't needed.??? Maybe if the top guy at the Comhairle didn't get paid quite so much there would be a bit more money for other things.

tanith from point


Finance departments will tell you that PPP is just PFI by another name. Main problems I have heard of with PPP are that you pay about 3 times what it would have cost for the Council just to build a new school, except that because of phased payments it's easier, but it's still an unnecessary waste of money. Then you have the whole issue of how it affects the Council's accounts if they do eventually decide it has to sit on the balance sheet (as it should if finance people have any sense).

Not a PPP fan from mainland




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