Pathfinder PFI school plan is too dear

Partnerships for Schools (PfS) is concerned that the not-for-profit model being developed by the three councils is more expensive than the traditional PFI models adopted by the other three pathfinders. Sources say PfS will not fund the scheme unless the councils change the model.

One consultant told CJ: "Under a PFI-based model, profit is dependent on efficient delivery. Under Greenwich's scheme, since there is effectively no profit, the private sector gets big fat management fees, but these are not related to efficiency. PfS says this is not best value."

Another source said: "We understand that PfS is threatening to pull the plug and replace Greenwich with a scheme from the first wave."

One contractor commented: "It's a dog of a scheme. It should be shot. It won't get any interest."

The Greenwich schools not-for-profit model is similar to a not-for-profit PFI model developed for Greenwich's leisure services. It also draws on the experience of Argyll and Bute's not-for-profit distributing organisation (NPDO) model being used on its £75m PFI schools contract.

The NPDO is 100% debt-financed, so the surplus is re-invested in the council's school stock instead of being paid out to shareholders.

The strategic partner is expected to bring some elements of social enterprise and a distribution of profit for the benefit of the community into the partnership.