This investigation into PFI contracts is fascinating:
PFI schools were introduced by the last Labour government as a way of getting new buildings without paying upfront. Hundreds of new schools were delivered. But the contracts, which typically last 30 years, require high annual payments throughout that time and must be honoured regardless of the effects of population change or parental choice on school rolls.
The new Bishops Park School, in Clacton, Essex, was open for only three years before closing after expected housing development failed to materialise.
The building has been taken over by another school, Clacton Coastal Academy, which is temporarily teaching some former Bishops Park pupils in it. However, the academy’s head teacher said he wanted to move them to its main site in Clacton town centre.
About £10?million has already been paid for the school but the PFI contract still requires payments of £1.8?million to be made for the building each year until 2035. In total, taxpayers will have to repay about £55?million for the school, more than twice what the building would be worth even if it was in full use.
In Brighton, the city council had to pay £4.6?million to buy out the contract for the Comart PFI school after it closed due to falling rolls. In County Down, Balmoral High School was closed but taxpayers must still pay the PFI contractor £370,000 a year for the empty building until 2027. Some of the classrooms are in temporary use by another school.
Leave aside the why it was done: Gordon Brown wanted to have lots of infrastructure but didn\’t want to have to say he was paying for it. So get it financed off the books.
Leave aside the opposite point, that it isn\’t as expensive as it seems, for it rolls together capital and maintenance costs in a way that other methods of budgeting don\’t.
Think instead of what this shows us of the socialist (or if you prefer, plannerist) mindset that infest so much of UK society. No, this isn\’t limited to the left it\’s just more virulent there.
That we should be planning the future: indeed we must. Failing entirely to understand that you simply cannot gather enough information in order to be able to plan the complexity for three decades out.
Sure, of course, you do need to be able to decide where and how large to build schools and you\’d rather like them to have a decades long life as infrastucture. But it all needs to be a lot more flexible than deciding 30 years in advance who is going to, or even when they\’re going to, repaint the walls.
And if we have this problem with schools, which we do, then imagine how much more difficult the planning of the production side of the economy is going to be? We might be able to make a good guess about what is going to be the hot new technological area in 2018. But anyone seriously predicting what it will be in 2035 (except in the most general terms, biopharma perhaps, or renewable energy) would and should be derided as entirely barking.
And yet we do still have those who would say it is both possible and desirable that we should, through politics and the bureaucracy, try to plan these things.
Even when we\’ve the evidence that in something much more stable, schooling, the wheels come off such planning attempts after only a decade.
In short, it\’s not just the way that PFI was financed. It\’s the way that an attempt was made to plan in detail decades out. something that really just doesn\’t work.