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Private financed schools costing £244m a year

Taxpayers faced with the huge repayment costs for schools built through PPP and PFI funding schemes.

20 March 2010 06:30 GMT

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Private financed schools costing £244m a year

Taxpayers: Huge annual bill for private financed schools

The annual repayment costs for schools built through private finance schemes hit £244million last year, official figures showed.

This total, for 2008/09, is up £62million on the previous year and continues a steady rise in costs over the past decade.

Public private partnerships (PPP) and private finance initiatives (PFI) see private funding used to build public projects like schools and hospitals.

Education Secretary Mike Russell said: "The folly of Labour's ideological obsession with PFI has now been laid bare.

"Instead of paying for schools and nurseries in the normal way, they mortgaged the financial future of Scotland's councils and, as a result, today's pupils are burdened with Labour's PFI poisoned chalice."

The SNP Government want to phase out the use of PPP/PFI schemes in favour a non-profit distribution (NPD) scheme which caps the profits that firms can make.

But its own Scottish Futures Trust scheme has come under opposition attack over a lack of activity.

The figures show that Glasgow had the biggest bill in Scotland of £45.4million in 2008/09 while in Edinburgh the figure was £20million and in Highland it was £16.3million.

The repayments represented 3.8% of total council spending on education in 2007/08 and in some areas account for £1 in every £10 spent on education, according to Mr Russell.

He added: "These projects were put in train while Labour were in power and it was effectively impossible to unpick them, even where final sign-off had not quite been reached, by the time we took office.

"Now, however, the reality of Labour's PFI is that councils are obliged to pay these bills before they give any thought to other priorities in education.

"That means that almost a quarter of a billion pounds is now being top-sliced from council education budgets to pay for the private profits of PFI programmes, and that bill is rising all the time."

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