Credit extension ensures Pimlico row rumbles on

6 Apr 00
The slow and painful negotiations to shore up the ailing Pimlico School PFI deal have been given a new lease of life with a last-minute extension of the credit allocation for the project.

07 April 2000

Officials from the Department for Education and Employment seem determined to press ahead with the controversial scheme despite the concerns of the governing body.

The last-ditch hope of the governors hinged on whether the government would allow the PFI credit allocation to expire. The allocation, which sets out and safeguards the costs involved in the proposed scheme, was due to run out on March 31.

However, education minister Jacqui Smith has been granted an extension from the Treasury, suggesting that the government is determined the deal will be signed.

Michael Ball, the vice-chair of governors, said the governing body had repeatedly asked for an objective assessment of the deal to assuage their fears. 'We had a meeting with the minister on March 8 but we have had no clear reply to our request. In the meantime we have been unable to do anything and the situation has dragged on.'

The latest row has been rumbling on for months and follows the complete rejection of the scheme by the Pimlico governors last November. DfEE officials had given the governors an ultimatum to come to some agreement or the deal would collapse.

Westminster City Council is determined to press ahead with the scheme and has privately criticised the governors for hampering its attempts.

The long delays suggest the project is giving government officials a headache. After two meetings, in November and March, the problems remain, suggesting the DfEE is having trouble resolving the issue. If it dropped the scheme, and allowed a refurbishment of the school – the preferred option of the governors – it would dismay the pro-PFI lobby.

However, to go against the wishes of the governors would reinforce its interventionist reputation.

Now it seems ministers are prepared to force through the deal, backed by the council. A DfEE spokesman said the department was continuing to work with the governors and the council to find a suitable solution.

Westminster City Council was unavailable for comment as Public Finance went to press.


Did you enjoy this article?