Taxpayers face huge ‘unjust’ bill for opt-out academies

John Mann
John Mann
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YORKSHIRE councils could be forced to pay millions of pounds for schools which they no longer run or own because of the number of academies which are tied to lengthy and expensive private finance initiative deals.

Three education authorities in the region have confirmed they are still having to meet PFI contract costs from their own budgets to pay for schools which no longer belong to them.

Schools which have been developed under a PFI deal normally tie the council into a 25-year-contract to pay off the developer for the buildings.

But there are major questions over who should make these payments if a school opts to leave local authority control to become an autonomous academy funded directly from the Department for Education (DFE), with one MP and a teaching union official claiming it is unfair to expect councils to continue paying the bill.

The Yorkshire Post can reveal the PFI costs of only three schools which are converting to academy status will cost two councils in the region almost £6m over the life of the contracts.

In Calderdale the planned conversion of two PFI schools, Ryburn Valley High in Sowerby and Sowerby Bridge High, could cost other schools in the district more than £4m over the next 18 years.

A Calderdale Council report last month revealed the DfE was expecting the authority to continue to meet £230,000 a year PFI costs associated with the schools.

Its director of children’s services Stuart Smith said this payment would be made through Calderdale’s dedicated schools grant which meant other council-run schools in the district would have less funding.

Kirklees Council has confirmed that it is paying a £7,000 share of the £60,000 a month payment on a PFI contract at Moor End Academy, in Huddersfield, which converted last year.

The contract was signed in 2001 and runs until 2033 meaning over the next 21 years the council could pay £1,764,000 for a school which it no longer runs.

Leeds Council is also expecting to continue meeting some of the costs of PFI deals at four schools in the city which have become or are applying for academy status. An authority spokeswoman said it was not possible to provide an exact figure. There are three Leeds schools bidding for academy status which were built under PFI deals: John Smeaton, Rodillian and Primrose. South Leeds has already become an academy.

A DfE spokeswoman said councils should use an area’s dedicated schools grant (DSG) for PFI payments as this includes funding for academies, a claim disputed by some local education authority bosses.

So far at least 16 PFI schools across Yorkshire are applying or have become academies.

Barnsley Council said it was in discussions with the DfE over who should pay PFI payments. Kirk Balk Advanced Learning Centre – one of the Barnsley schools rebuilt under a massive PFI contract – and Littleworth Grange primary have applied.

Education bosses at both Bradford and Sheffield Council, where seven PFI schools have bid to become academies, said they believed the DfE would pick up the costs of the contracts involved.

John Mann, Bassetlaw Labour MP and Treasury select committee member, said: “This is a dog’s breakfast. This has happened because the academies Bill was rushed through. If they had done this in a considered way they would have seen this PFI issue coming and resolved it.”

Calderdale NUT’s branch secretary Sue McMahon said: “It’s an injustice. Money that should be spent on pupils in council run schools will instead be used to help to pay for the costs of an academy.”

Funding issue delays programmes

THE issue of how PFI deals are managed has caused major delays to the Government’s academies programme.

Tapton School, in Sheffield, was one of the first to be affected by this after its academy bid was halted last year because of concerns raised by the bank which financed its PFI contract. The school had planned to convert at the beginning of this academic year but the move was postponed.

Last year Schools Minister Nick Gibb said banks had raised concerns whether councils had the legal power to make payments for PFI academies – a move which delayed 16 academy conversion bids by PFI-built schools.