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£100million siphoned from council schools in PFI subterfuge!
 SOLIDARITY - Scotland’s Socialist Movement, claims to have uncovered a long-running ‘subterfuge’ by which central government funds - publicly destined for council schools - are routed instead via local councils to help pay PFI/PPP
charges.
The Scottish Executive/Government once had a fund called the Schools Fund, a ring-fenced capital grant to local authorities “for the purpose of making improvements to the school estate.” In the financial year 2007/08 this amounted to £146.05million. [source d]
Steve Arnott. Solidarity Assistant national Secretary said, “the previous Labour administration initiated a secret scheme whereby part of the ‘ring-fenced’ Schools fund could be used by a council to pay PFI charges instead of improving its own council run schools. A labyrinthine paper trail has been employed to obscure the process.”
“The Schools Fund was looted because, contrary to the tales told then and now, the expensive PFI projects could not be met from the Councils’ own revenue resources.”
“However this Schools Fund was recently subsumed within the General Capital Grant allocations to local authorities. The General Capital Grant had been ring-fenced for new-build, it was not be used to subsidise Revenue accounts. The subterfuge was overlooked when the two funds were merged by the new SNP administration in 2008. The terms of the General Capital Grant, following proper accounting practice, preclude councils using their general grant allocation to meet revenue costs. “ [source: b]
Solidarity’s Frank Ward, the Highlands based member who uncovered the scandal added “We believe the SNP government has been in secret negotiations with CoSLA and various councils to continue to divert this former ‘Schools Fund’ money from local authority capital budgets and into PPP/PFI repayments. This money, once ring-fenced capital for our council schools, is to be spent instead on helping to meet the heavy PPP/PFI charges which must be paid from Revenue accounts. “ [source: c]
“Over a 5-year period, over £100 million is thus secretively channelled from the public purse into private pockets.” “For individual councils, the effects are harsh. For example, the Highland Council will leech over £76million from its own schools to pay for its PPP2 project over 30 years.“ [source: a]. “Little wonder our schools are crumbling.”
In total, Councils were planning on using £12m in 2008-09, £22.5m in 2009-10 and £23.679m in 2010-11 from the Schools Fund towards PPP unitary charges.
Solidarity believes that 13 of Scotland’s councils are in dire straits regarding PPP repayments that they once filched, with New Labour’s encouragement, from the former Schools Fund. The SNP government has quietly agreed, for the next three years at least, that £20 million per year may be syphoned off from capital grants to help fund council PFI repayments, and that an “interim arrangement” has been agreed to extend the current deal beyond year 2011. [source: b]
Mr Arnott concluded “it may be that the SNP believe they have little choice in this because of the tight financial settlement, otherwise the charges would fall on local council tax payers. But there has been no compensatory increase in the General Capital Grant, and no public statement about the scandal.”
“This is yet another example of how the true costs of PFI projects are hidden from view. “
Sources:
[a] Highland Council School Fund £76,533,428.00 used towards PPP2 unitary charge over 30 years: PPP2 Financial Close Version 2 December 2006 [recently published on Highland Council website], page 33 Table 9.2 [b] COSLA document Executive Group Item 7. Undated, but I think sometime in 2005/6:http://www.cosla.gov.uk/attachments/execgroups/rc/rc081105item07.doc. [c] The Highland Council Budget Information Group 4/12/2008 Minutes, [d] From Scottish executive schools directorate 10 July 2007 THE SCHOOLS FUND 2007-08 - ADDITIONAL ALLOCATION |
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