Next year York will get three new primary schools, built and run by private companies under a Private Finance Initiative (PFI) scheme. Education Reporter Rosemary Curtis asks why a private company is being used to run the schools and how it will work in practice.

YORK is desperate for three new schools, and the only way it can get them is through the PFI scheme, according to Damon Copperthwaite.

"The council could not afford it," said City of York Council's PFI project manager. "If it was to provide a school from scratch they would have to find £14.5 million, and would also have to run it and take the risk on.

"It just did not have £14.5m for this purpose."

The schools, which will replace Hob Moor, St Oswalds and St Barnabas, will be built by a private company and will be run for the next 25 years by the company.

The PFI scheme works like a mortgage - the council borrows the cash from the company and pays it back over 25 years.

Everything from school dinners to the cleaning will be provided during that 25 years by the company, which in this case is the Sewell Group.

Teachers, however, will still be appointed in the usual way.

Damon said the scheme will benefit the council, which will not have to outlay a large sum of cash or take on the responsibility and cost of running a school.

It is also thought a private company would be better able to build more efficiently and effectively than the council.

Damon said: "The special thing about PFI is the risk transfer.

"If the local education authority (LEA) had to design it, build it and provide all the services for the next 25 years it would take on all the risk. By entering into a PFI agreement the provider takes on all the risk."

But if a private company is running a school, surely they would be more interesting in making money than providing a good place for children to be educated? According to Damon this is not the case.

He said: "There is a large incentive for the provider to make sure it provides the right standard of service to the end.

"The only way the provider gets the total money back is if it completes the full 25 years."

The council has also laid down strict regulations on the standards of what the company provides, such as the nutritional value of food and standards of cleanliness.

"They have to meet criteria on certain policies and we get to have a say," he said. Concern has also been raised about how school buildings will be used during the holidays and after school.

Damon stressed the buildings would belong to the council. However, the company would be entitled to use them for other purposes.

He said: "We have granted them the licence to use the school for other purposes, this reduces the overall cost to the council.

"But one of the reasons we selected Sewell was that, as part of their submission, they said they would not actively seek a further use for it."

Although the Sewell Group has been chosen, Damon says there is still much negotiating to be done before the deal is finalised to make sure both sides are happy.

Outline planning permission has been granted for all three sites, and if all goes to plan it is hoped the schools will be up and running by September 2005.

Updated: 09:36 Wednesday, March 24, 2004