Old private-finance deals still taking £8.5m a year out of education budget for Borders

Earlston High School.
Earlston High School.

Scottish Borders Council’s children and young persons’ service is spending £8.5m a year repaying historic debts generated by private-finance deals, latest figures reveal.

The local authority spends nearly 8% of its education budget repaying private-finance initiative (PFI) deals it signed nearly a decade ago under the council’s then Conservative-Liberal Democrat-independent ruling administration.

PFI contracts, first introduced during John Major’s Conservative government and massively expanded following Labour’s election victory in 1997, involve private financing being used to build and run public-sector infrastructure projects.

In the case of Scottish Borders Council, PFIs were used to build to Earlston, Berwickshire and Eyemouth high schools, incurring massive debts the council is still repaying years after they were constructed.

The figures come from the Scottish Parliament Information Centre. It found that PFI charges for schools north of the border in 2018-19 cost the Scottish Government £434.3m, accounting for 8.5% of its total resource budget of £5.1bn.

Midlothian South, Tweeddale and Lauderdale MSP Christine Grahame believes that much of the blame lies with the Scottish Government at the time, saying: “This toxic PFI legacy of Labour, propped up by the Lib Dems in coalition government, means the public purse is still paying heavily over the odds servicing their decade-old debts.

“They ought to apologise for their mistakes, which will cost Borders schools £8.9m this year alone, representing 8% of the entire schools budget.

“Money that councils could use to pay for teachers, books and facilities is being used to pay for their mistakes.

“And let’s not forget, last year alone over £1bn was taken from Scotland’s public services to pay off these PFI debts. That’s a figure as eye-watering as it is disgraceful.

“Thanks to Labour’s shameful legacy, enabled by the Lib Dems, the reality is that we are going to be saddled with this bill for years come.”

A council spokesperson said: “The council spent £8.549m on servicing school unitary charge arrangements in 2017-18, representing 7.9% of the total children and young people’s budget.

“This current annual investment delivers 21st century educational environments for school pupils and includes all ongoing facilities management and life-cycle maintenance.”