06 October 2000
As Public Finance went to press, Smith was due to respond to a joint approach from the school governors and Westminster City Council setting out their plan of action for the scheme, which has had a long and turbulent history.
In a letter to the government sent on September 29, the school governors and Westminster stress they are working hard to find a joint way forward and want the PFI credit allocation extended until November 30. The governors are determined to pursue an alternative option to PFI if possible, although the council remains committed to the scheme.
However, the new co-operation between the governors and the council is giving Smith a headache. Already dealing with accusations from the European Commission that the tendering process for the project has broken European law, Smith must also consider whether any real agreement is likely between both sides.
With continuous in-fighting and a complete standstill on the issue, the minister issued an ultimatum to both parties at the beginning of August demanding that some form of agreement was reached.
Giving a deadline of September 30, her letter warned: 'If your statement does not clearly address the viability of the PFI project, one way or the other, there is no prospect of the PFI credit allocation continuing.'
If the government has the stomach to push ahead with the scheme, that vow will have to be reversed.
The letter from Pimlico School governor, Europe Singh, and Westminster's director of education, John Harris, said a working party had commissioned urgent new information to help the governing body come to a decision.
The letter adds: 'The final response by November 30, which we are keen is owned by all the stakeholders, will give a definitive response to the way forward and will specifically address the governors' decision on the existing PFI proposal.'
A spokesman from the Department for Education and Employment said that ministers 'were considering the letter' and would make a decision 'soon' on whether the PFI credit allocation would be extended.
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