16 July 1999
In a robust defence of the controversial scheme, the minister said private sector cash was the key to fulfilling government plans to increase the number of students by just over 1 million to 5.1 million in three years, as well as upgrade facilities.
Milburn told a 200-strong audience at a Further Education Funding Council (FEFC) conference on July 13, largely made up of prospective private sector contractors: 'We want to see this government's commitment to further education mirrored by a new commitment from PFI partners and colleges alike to make the Private Finance Initiative as much a success story in education as it has been in health.'
So far, further education has lagged behind other sectors. Since Labour's General Election victory in May 1997, only seven projects have been signed at a value of £37m. In health, 31 major contracts worth £2.9bn have been signed. In total, New Labour has overseen £4bn worth of PFI contracts since coming to power.
There are signs that further education is warming to PFI, as 330 schemes have been identified by 145 colleges as having public-private partnership potential.
Lord Bryan Davies, chairman of the FEFC and a former Labour MP, said the private sector could play a major role in developing colleges' facilities.
Milburn said New Labour's embrace of the PFI had come after the process had been overhauled and was now 'working properly'.
And, in a follow-on from last week's clash between Tony Blair and John Prescott over the public sector, Milburn, an arch-moderniser, robustly defended Labour's policies. 'Public services have to prove their worth,' he told the conference. 'They have to dramatically improve their productivity, their efficiency and their performance.'
However, the move to expand PFI in education has not pleased everyone. Milburn was met outside by protesters who argued that PFI would lead to pay and staff cuts.
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