North Ayrshire paying back £17,127,000 a year until 2038.
North Ayrshire’s St Matthew’s Academy, Greenwood Academy, Arran High School and Stanley Primary School were built at a cost of £83m in the mid 2000s.
They were constructed under the Private Public Partnership (PPP) scheme which promoted a ‘build now pay later’ deal with private firms. Many local authorities, struggling for cash, used the PPP and private finance initiative (PFI) schemes, despite warnings from campaigners.
The schemes were encouraged by the Conservative government in the 1990s, and by the Labour government in the late 90s and early 2000s as a way of using private firms to construct schools and hospitals for local authorities.
The private firms put up the cash for construction but the partnerships meant local authorities were saddled with annual payments to the private firms over a lengthy period.
In North Ayrshire’s case, the council will be paying at least £17,127,000 a year back – until 2038.
North Coast independent councillor Ian Murdoch requested an update on the PPP costs at last week’s full council meeting.
Finance chair Christina Larsen revealed NAC had paid £219,494,000 to private firms for the four schools up to 2024/25. The projected spend for 2025/26 alone is £17,127,000.
And by the end of the contracts in 2038, the total cost will be just short of half a billion pounds.
After the figures were revealed, Cllr Murdoch asked: “Is the cabinet member concerned that the PPP contracts have never been renegotiated or that they can’t be renegotiated, and is she concerned that by the figures, particularly the total of £455,740,000?”
Cllr Larsen replied: “I understand that this is a recurring frustration for Cllr Murdoch. It is not the first time he has raised it within this chamber.
“I do sympathise and I think a lot of us within this chamber are frustrated with the situation. However, we cannot change decisions made in 2005. We can’t change what the political decisions were.
“The contracts we got into we now just have to fulfil, and that’s what we intend to do.”
At the time of the decision to take on PPP contracts, the make-up of the council was very different. Labour, led by Cllr David O’Neill, had 22 councillors, with just four Conservatives, three SNP members and one independent.
A North Ayrshire Council spokesperson said last year: “The value of the PPP contracts was subject to rigorous scrutiny at the point these were agreed.
“The council has well-established and robust processes in place to ensure the contractors deliver the PPP contracts in line with their obligations.
“The council has, and always will, strive to ensure that our pupils have the best possible education, in schools which are fit for the needs of the 21st century.”
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