What part has PFI played in the hole in our Council Budgets?

What part has PFI played in the hole in our Council Budgets?

I was shocked to read in my local press this week that Labour controlled North Lanarkshire Council’s education chiefs are paying private firms £729million to build schools worth around just a fifth of that amount.

North Lanarkshire Council have saddled a generation of taxpayers with an enormous debt by entering into a 31-year Private Finance Initiative to build schools.

The local authority says the arrangement provides “excellent education in first-class facilities” for children. But so does prudential borrowing without the huge costs.

PPP/ PFI funding has been widely condemned for offering poor value for money and this is why it was replaced by the SNP Government by the Scottish Futures Trust which earlier this year announced savings of £131m during the year. The trust believes its efficiency drive has cut costs on the school building budget so much that it can afford to construct another 12 schools across Scotland.

In the context of these PFI debts,  I must raise serious concerns regarding the budget cuts proposals outlined in North Lanarkshire Council’s consultation exercise; “ The Way Ahead, Let’s Talk About Our Future”.

This consultation seeks the views of the public on what the spending priorities set by the Council should be.

On the “Where the money comes from” section on Page 7 of the document (which details the spending in 2011 -2012) it states that the Scottish Government provides £549.17 million, representing 58% of the Council budget. One might expect that this figure represents the full amount of funding allocated to North Lanarkshire Council by the Scottish Government.  However, Scottish Government figures show that North Lanarkshire Council were allocated £652.2 million in revenue, £28.5 Million in capital funding, and that additional sums were added over this spending period of £3.6 million revenue funding.

At a time when it is consulting over school closures can North Lanarkshire Council explain what has happened to the missing £139.13 million of Scottish Government funding?  I think in the interests of transparency this needs to be clarified.

North Lanarkshire Council indicates that this consultation, now closed, received over 3,000 responses from 148,000 consultation booklets distributed. The Council are hailing this process as “a success for local democracy”. The numbers hardly seem to justify this.  More worryingly there seems to be some dubiety about the distribution.  The minutes from Wishaw Community Council, under Councillors’ Reports state

“Councillor Fellows intimated her concerns with regards to the consultation exercise around the need for North Lanarkshire Council to save £73.3 million for the financial years 2013/14 to 2015/16. She advised that many members of the public had informed her that they had not received the booklet “The Way Ahead” therefore were unable to respond to the consultation, while many of her constituents had expressed their concern with regards to the possible closure of Belhaven Home, the changes to free school travel and the uplifting of waste.

 

Some discussion followed during which many members informed Councillor Fellows that they were not aware of any booklet or consultation period. Those who did were of the opinion that the booklet did not speak in a language they understood nor did it reflect how these savings would affect those must vulnerable within local communities in North Lanarkshire. The unanimous decision of the membership was that these were not savings options, but cuts, with a dedicated workforce expected to deliver continuity of care to an increasing older population with over 1000 less employees. “   

 

North Lanarkshire is one of Scotland’s largest councils and the proposed savings options -estimated at approximately £105 million – could threaten thousands of jobs, with the potential loss of approximately 1,300 full-time posts. This signals the beginning of a series of compulsory redundancies over the next three years in a bid to save millions of pounds.

North Lanarkshire Council claim an estimated £73.3m has to be saved between 2013 and 2016; the options they outline include reducing free school bus services, axing lunchtime crossing patrols and changes to bin collections from a fortnightly cycle to a three week cycle and reducing grants to Citizens Advice Bureaux. Also, notwithstanding, savings proposals outlined in the consultation plan, including closing care homes, merging schools, and halving the number of learning support teachers.

Residents from across the area have raised grave concerns of what life will be like if these proposals go ahead. One example of the many concerns raised is the suggestion of extending the existing geographical limit for transportation of primary pupils from one mile to two miles, leaving parents worrying over the cost of getting their kids to school.

At a time when the Westminster Welfare Reforms will begin to hit the most vulnerable in Scotland, the priority of retaining much needed jobs and front-line services within our communities is more vital than ever.

North Lanarkshire’s savings proposals are hitting the most vulnerable and the lowest paid members of our communities. Meanwhile their choice to pay private firms £729million to build schools worth around just a fifth of that amount puts into question North Lanarkshire Labour’s fitness to run the local authority.

 

 

Notes:

1)       The consultation ‘The Way Ahead’ began on October 1 and ended on November 9, approximately 148,000 households in the council area were targeted to receive the 20-page consultation booklet.