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Cash for schools PFI work slashed
16:33 31 Jul 2002
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Exclusive by Ross Pearman
The government's programme of schools PFI works is under threat after a gap in finances of nearly £300m was uncovered this week.
According to a source close to the Department for Education and Skills' (DfES) PFI department, capital investment for schools seems to have dropped from £939m for 2003/04 to £850m. A reduction of about £90m a year is expected for the following two years.
"Evidence of the figures is proving difficult as there is still a period of settling in following the Comprehensive Spending Review (CSR)," the source added. "More will be known in September when all objections have been voiced and regional spending plans have been finalised following the 61-page letter from central government over the recommendations. However, from what I have seen, the signs make grim reading."
The DfES press office was unable to disprove the accusation, saying that the figures for capital investment for building and modernising schools up to 2005/06 are not available.
The source said that although the government announced an extra capital spending of £4.3bn by 2005/06 in its recent CSR, the funding for the building and maintenance of schools would be £400m less in real terms after allowing for inflation.
Other concerns centre around new financial demands on government departments, which will see a large chunk of finances being ringfenced to spend on information and communication technology.
"This is causing great controversy and some concerns among PFI players," added the source.
"The DfES is now left with two options," said the insider. "It can either go on with its current building schedule and hope that the Treasury will bail it out, or it could slow down the workload, which would be a hard pill to swallow for contractors and local education authorities."
It is claimed that the department was helped out last year by a £100m bail-out by the Treasury on a series of projects.
Last year, the Confederation of British Industry estimated the repairs backlog in schools to be in excess of £7bn.
The government's programme of schools PFI works is under threat after a gap in finances of nearly £300m was uncovered this week.
According to a source close to the Department for Education and Skills' (DfES) PFI department, capital investment for schools seems to have dropped from £939m for 2003/04 to £850m. A reduction of about £90m a year is expected for the following two years.
"Evidence of the figures is proving difficult as there is still a period of settling in following the Comprehensive Spending Review (CSR)," the source added. "More will be known in September when all objections have been voiced and regional spending plans have been finalised following the 61-page letter from central government over the recommendations. However, from what I have seen, the signs make grim reading."
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The DfES press office was unable to disprove the accusation, saying that the figures for capital investment for building and modernising schools up to 2005/06 are not available.
The source said that although the government announced an extra capital spending of £4.3bn by 2005/06 in its recent CSR, the funding for the building and maintenance of schools would be £400m less in real terms after allowing for inflation.
Other concerns centre around new financial demands on government departments, which will see a large chunk of finances being ringfenced to spend on information and communication technology.
"This is causing great controversy and some concerns among PFI players," added the source.
"The DfES is now left with two options," said the insider. "It can either go on with its current building schedule and hope that the Treasury will bail it out, or it could slow down the workload, which would be a hard pill to swallow for contractors and local education authorities."
It is claimed that the department was helped out last year by a £100m bail-out by the Treasury on a series of projects.
Last year, the Confederation of British Industry estimated the repairs backlog in schools to be in excess of £7bn.
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