The huge cost of building new schools under PFI and NPD contracts in Scotland has been laid bare at almost £18billion.
An analysis by the Scottish Daily Express shows youngsters at school today will be parents themselves by the time the huge bill is paid off.
Despite the sum, many Scottish schools are still overcrowded and in poor condition, according to the same publication, with some 101 schools currently at 100 percent capacity or more.
Three schools are currently graded ‘D’ for the condition of their buildings – Forres Academy and Alves Primary in Moray as well as Ardrossan Academy in North Ayrshire – with a further 221 graded ‘C’.
In addition, there are nine schools graded ‘D’ for the suitability of the school estate and 260 graded ‘C’. With 2,344 schools in Scotland, this represents 11.5 percent of the national total.
To improve the nation’s crumbling classrooms, hundreds of new schools have been built over the past 25-30 years.
The first wave of school-building under the New Labour administration was paid for under the Private Finance Initiative (PFI) method of funding.
There were 34 projects signed off in the early years of devolution between 1998 and 2007, resulting in the construction of new schools with a capital value of £3billion.
However, the total value of payments for these contracts – agreed over periods ranging from 25 to 33 years – was a staggering £13bn.
Seventeen years after the SNP halted the use of PFI (also known as PPP), there is still £9.2bn outstanding on the first wave of schools.
The biggest contract was Glasgow Schools, the largest education PFI in Europe said to be worth £1.2bn – although the payments on the books total £1.5bn with £429m still outstanding.
Signed off in January 1998, it involved 12 new schools being built from scratch and a further 17 being modernised, along with 30 years of “support”.
Other mega-PFI deals agreed during this period include South Lanarkshire Schools, worth £1.2bn in payments with £745m still outstanding and signed off in January 2003.
Under the deal, 17 new secondary schools were built and two were refurbished. Highland Schools PPP2, worth £719m in payments with £384m still outstanding and signed off in August 2003, was the third largest of the New Labour era with 11 new schools built.
In 2007, the SNP manifesto declared: “The Private Finance Initiative was devised by the Tories and has been embraced with enthusiasm by New Labour. However it is really a type of privatisation, with all the disadvantages which that entails.”
Alex Salmond described PFI as a “quick fix” and a “costly mistake” and the incoming administration came up with a replacement, called the Non Profit Distributing (NPD) model. However, the cost to the public purse was almost as large.
Scottish Daily Express’s investigation found 32 school-building contracts have been signed under NPD, with a capital value of £1,293m and a total repayment burden of £4.1bn, of which £2.8bn is still outstanding.
The capital value is £79.4m and total payments will be £303.6m – around £33m per school. By contrast, the NPD contract for Alford Academy in Aberdeenshire puts the capital value at £18.4m and the payments at £64m.
Another Aberdeenshire NPD, for Inverurie Community Campus, will cost the taxpayer £138.8m over 25 years. The new building also includes a leisure centre and swimming pool for the town.
The Scottish Government has now abandoned the NPD model after a damning report by Audit Scotland found it would’ve been cheaper just to borrow the money from the Treasury or elsewhere to pay for big infrastructure projects. It also emerged the scheme had fallen foul of EU rules over the balance of public and private sector spending.
In fact, some of the schools built under NPD are already overcrowded. Alford Academy is at 100.6 percent capacity, Wick High School is at 96.2 percent and Greenfaulds High School in Cumbernauld is at 94.5 percent.
The overcrowding figures are even more stark for some of the schools built under the older PFI/PPP regime. For example, St Andrew’s and St Bride’s High School in East Kilbride was part of the bumper South Lanarkshire Schools project.
It is currently at 108.4 percent capacity and the suitability of the estate is graded ‘C’, while Holy Cross High School in Hamilton is at 104.5 percent capacity and also graded ‘C’ for suitability.
Meanwhile, the schools built under both PFI and NPD have been subject to a number of scandals. In 2016, 17 schools in Edinburgh built under PFI had to close after a wall collapsed at Oxgangs Primary during a storm, bringing down nine tonnes of masonry but without any injuries.
A damning report later highlighted a “lack of scrutiny” over the contract and it triggered reviews of PFI/NPD schools in councils across Scotland, with dozens of schools undergoing repairs on “brick skin” walls built using wall ties that were often found to be missing by inspectors in the Scottish capital.
While some of the older PFI deals are now approaching the end of their terms, the most recent NPD schools still have decades to go before they are paid off.
Some six schools – Jedburgh, Queensferry High School, Inverurie, Queen Margaret Academy in South Ayrshire, Bertha Park Academy in Perthshire and Cumbernauld Academy – will continue draining the public purse until 2044/45.
By this time, many of today’s pupils will no doubt be parents themselves – and some of those who attended the first tranche of PFI schools from the early 2000s will doubtless be grandparents and still paying off the bill for decisions taken almost 50 years earlier.
