Brent throws out its schools PFI

4 Oct 01
Public-private partnerships suffered a new blow this week when the London Borough of Brent rejected a multimillion pound Private Finance Initiative education project because it did not provide value for money.

05 October 2001

The news comes two weeks after Kent abandoned a £100m outsourcing deal with Hyder Business Services after ten months of negotiations.

Brent councillors decided to dump the PFI project, costed at £23m, after spending more than two years considering the scheme. The final bids, from two companies, Jarvis and Accord, were thought to have been set at more than £40m.

Angry union officials say the council will have spent hundreds of thousands of pounds on the failed project. 'Our argument is that PFI has got to provide value for money and this doesn't,' said Tony Warr, an organiser with the GMB union.

The plan, to refurbish or rebuild 17 primary and secondary schools in the north-west London borough, had been one of the most significant education PFI projects in the country.

Only a handful of other schemes had included plans to upgrade more schools.

A statement by Brent said the PFI had been scrapped 'for reasons which are outside the council's control'.

The council is now looking at alternative ways of funding the project. Whichever method is selected, Brent said it would be slimmed down to contain fewer than 17 schools.

It also emerged this week that the London Borough of Newham is set to end its housing benefits contract with CSL because the company has failed to clear the claims backlog.

The authority's Cabinet committee is due to meet on October 15 to discuss the contract, which has been beset with difficulties since it started in June 1999.

Delays in processing claims meant that backlogs began building up almost immediately and have still not been cleared. The seven-year contract, worth nearly £5m a year and covering back-office operations, was criticised last year in a report from the Benefit Fraud Inspectorate.

Inspectors found that processing times had increased, service levels had dropped substantially and planned savings for the council had failed to materialise in the first year that CSL ran the service.

A spokeswoman for Newham confirmed that discussions on whether to terminate the contract and bring housing benefits back in-house are taking place.

CSL was not available for comment.


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