PFI draining £millions from Scotland’s education budgets


New figures released by the Scottish Government reveal that PFI contracts are hitting local authority education budgets….

New figures released by the Scottish Government reveal that PFI contracts are hitting local authority education budgets.

The figures were included in a written answer to the SNP’s Christina McKelvie and showed that in 2008-09 PFI contracts took a £244 million chunk out of Scottish education, this was an increase of £62 million on the 2007-08 figure.

PFI was adopted by Labour as the means of funding capital building projects in the UK, it was based on the PPP system originally dreamed up by the Conservatives.  However the mechanism has been attacked by trade Unions and others who point to the massive profits being made by companies at the public’s expense.

Commenting, SNP MSP Ms McKelvie, a member of Holyrood’s Education Committee, said:
“A full 5 per cent of funds that should have been spent on education services in Scotland has drained away down Labour’s PFI plughole.

“The huge sum of £244 million that this represents lays bare the dreadful legacy of Labour’s PFI obsession, the burden of which is now being borne by Scotland’s schools, teachers, parents and pupils. When they were in office, Labour chose to mortgage the financial future of Scotland’s councils and the upshot is that, with each passing year, larger and larger sums of money are having to be taken out of Scotland’s classrooms in order to pay the PFI bills.

“In my own area, almost £15 million was slashed from the South Lanarkshire education budget alone. Councils across Scotland are obliged to pay for the private profits of the PFI companies before they can even begin to think about buying a single book or employing a single teacher or classroom assistant.”

The SNP have opposed the mechanism arguing that it is not cost effective and pointing out that future generations are being saddled with huge debts, they have halted the use of such funding in Scotland and have set up the Scottish Futures Trust as an alternative.

However Labour have continued with the practice in England and last year the Treasury had to step in and underwrite PFI contracts South of the border that were in danger of collapsing as the UK banking crisis hit hard.

Attacking Labour’s PFI debt legacy Ms McKelvie added:
“At a time when all public sector spending in Scotland has been put under enormous pressure by the £800 million of cuts imposed on the Scottish budget by Labour at Westminster, local authorities are having to cope with this additional drain on their resources imposed by Labour in Scotland.

“Only the SNP can be trusted to work to protect spending on frontline services such as education, in the face not only of Labour cuts but of Labour’s PFI debt legacy as well.”