Budget Crisis in Schools due to Soaring PFI Charges


Private Finance Initiative (PFI) schools in England are facing rising costs due to long-term contracts with private firms. These contracts, which last 25 to 30 years, have charges that increase with the highest measure of inflation. One school reported that nearly 20% of its budget is now spent on fulfilling its PFI contract. Over 900 schools in England were built through PFI contracts, which were scrapped in 2018. These schools are owned and maintained by the private sector until the debt is repaid by taxpayers’ money and the buildings become state-owned.

Middlefield Primary in Liverpool is one such school that is struggling with the terms of its PFI contract. The school’s head teacher, David Potter, said that nearly 20% of the school’s budget is spent on meeting the contract’s terms, which include specific maintenance, catering, and cleaning requirements. This year, the contract will cost more than £470,000, a rise of over £151,000 since 2021.

The contract also prevents the school from seeking better prices from other suppliers. This has led to budget cuts elsewhere, with four members of classroom staff not being replaced since 2020. Despite these challenges, PFI investors argue that the contracts offer long-term value for taxpayers.

Other schools are also dealing with similar issues. Cardinal Newman College in Oldham has faced numerous problems with its building, including issues with the roof and heating system. The school’s head teacher, Glyn Potts, expressed frustration at having to deal with these issues while trying to provide the best education for his students.

Despite these challenges, many head teachers have been advised against speaking out about the pressures caused by PFI costs due to non-disclosure agreements built into the contracts. However, some are now choosing to speak out about their experiences.

The Department for Education has stated that it plans to increase support for schools in PFI contracts by 10.4% in the coming financial year. Meanwhile, Lord John Hutton, speaking on behalf of PFI investors, argued that the contracts provide good value for taxpayers and ensure that schools are getting value for money in areas such as cleaning and catering.

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