The £1,092,160.12 PFI invoice connected to Lyndale School & why Wirral Council can afford to keep Lyndale open

The £1,092,160.12 PFI invoice connected to Lyndale School & why Wirral Council can afford to keep Lyndale open

The £1,092,160.12 PFI invoice connected to Lyndale School & why Wirral Council can afford to keep Lyndale open

                                               

Wirral Schools Services Limted Invoice Wirral Borough Council 12th December 2013 PFI Schools £1,092,160.12

To the left is a £1,092,160.12 invoice for Wirral Council for paying a company called Wirral School Services Limited under a PFI agreement. This is a monthly invoice, so the yearly total comes to about £12 million. As previously reported this is a story about money and education that is rather complex, but does connect to Lyndale School.

The current PFI contract was signed ten years ago, when Cllr Phil Davies was Cabinet Member for this area. It was originally supposed to run for 25 years in 2001 but was extended in 2004.

For many of these years, if I am getting this right, it was funded from general Council resources and not through the Schools Budget. This year £600,000 of costs for the PFI agreement are paid for by an £1.4 million underspend in money that it was agreed would be spent on special educational needs.

Next year, it’s been stated that Wirral Council want to reduce its contribution to the PFI agreement by £2 million, which led to some angry exchanges at a recent Wirral Schools Forum meeting about the consequences of this decision.

Basically it means that for 2015-16 (the year that there’s been the recent consultation on closing Lyndale) that £2 million of extra compensatory savings will have to be found because of a political decision. The actual funding from one year to the next that Wirral Council is receiving for education isn’t really changing that much so this £2 million issue has dare I say it ruffled some feathers.

I state political decision because (yes there was a U-turn on this last year so who knows really) statements already made are that Labour want to freeze Council Tax in 2015-16 at 2014-15 levels.

However, going back to Lyndale School (soon to be discussed at a special Cabinet meeting). This underspend on special educational needs (money already agreed that should be spent in this area) was shifted out of that budget to pay for the PFI costs. I have requested the actual contract between Wirral Council and Wirral School Services Limited, first by a freedom of information request (denied), now as part of the audit (I’m still waiting).

Based on what I do know, I can tell you this. Part of the PFI cost is funded by a fixed grant Wirral Council get of £5.5 million a year. There are facilities management support costs built into the contract that Wirral Council charge the schools for which total about £3.3 million a year. However this leaves a gap of £2.5 million.

Until this year (although strangely at the Lyndale call in officers stated that funding educational items from outside the schools budget would cause problems and as far as I remember somewhat glossed over the fact that they were already doing this to the tune of £millions for the PFI schools), Wirral Council have plugged this gap.

The problem is essentially due to a political decision not to raise Council Tax in 2015-16 and not carry on with this arrangement (diverting an underspend from special educational needs to plug the gap this year) that although the education money Wirral Council receive is hardly changing that from next year (when there’s a General Election on) the cuts to education can be blamed on the national coalition government despite this being a local decision that’s been made.

I’ve looked at what happened in another borough on Merseyside at their Schools Forum when there’s an underspend in special educational needs. The money didn’t get diverted in this way and was carried forward to the next year to be also spent in that budget area.

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