Academies in PFI confusion

THE use of the Private Finance Initiative, and the expansion of the school academies programme, are two controversial policy areas where successive governments have paid insufficient regard to the potential consequences of their decision-making.

Yet when the two issues converge, as PFI-funded schools look to convert to academies, the brainchild of Michael Gove, in order to enjoy greater independence, there are serious financial repercussions that the Education Secretary needs to acknowledge.

It should, of course, be noted that academies were not on the political horizon when Gordon Brown presided over a dramatic increase in PFI projects more than a decade ago – a scheme that would enable new schools and hospitals to be paid off over a 25-year timeframe.

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In many instances, the short-term advantage of improved facilities has been offset by longer-term financial ramifications that have left local authorities with far greater debts than they had envisaged. It gets even more complicated when academies are added to the equation, in part because there was no set template for the drawing up of PFI deals – each council used slightly different criteria to best suit their particular interests at the time.

And, if every PFI school was to become an academy, and Mr Gove is sympathetic to all schools enjoying some form of automony, the repayments still need to be honoured.

The pertinent question is how? LEAs in Bradford and Sheffield are among those who expect the Government and the academies to honour the repayments while councils in Leeds, Kirklees and Calderdale believe that they will still have to foot part of the bill for schools that no longer come under their jurisdiction.

And, to compound matters, some lenders who have previously underwritten PFI deals are now halting the conversion of some schools to academies until they have received clarity from Ministers.

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In providing this clarity, perhaps Mr Gove, reputedly one of the Government’s more impressive performers, and tipped by many to be asked to sort out the chaotic NHS reforms, can answer this question: why was the PFI conundrum not foreseen when the academies programme was drawn up? It’s an oversight that not only undermines his flagship policy, but drains the public’s confidence in their elected leaders.