Small colleges daunted by the prospect of PFI

April 19, 1996

As the Standing Conference of Principals' representative on the Department for Education and Employment Private Finance Initiative committee, I must take issue with your reporter(s) who consistently accredits the Committee of Vice Chancellors and Principals with creating the PFI agenda being debated within that committee.

While SCOP institutions endorse many of the concerns voiced by the universities, there are additional issues which make the prospect of the PFI daunting for smaller colleges of higher education. As has been debated, the additional cost for private sector deferred risk-taking is likely (but not necessarily) to be greater than borrowing over the long term but given the smaller amount of capital security available, and a smaller annual revenue budget, SCOP institutions are unlikely to be able to find PFI partners even if they wanted to.

Additionally, whatever happened to the commitment to the much-vaunted charter? Whenever PFI projects go wrong, as they inevitably will, do I and my colleagues refer parents' and students' complaints to the lead consultant/main contractor/maintenance and cleaning firms etc? The real cost of "front line" responsibility against the supposed benefits of "transferred" responsibility and risk is one that needs to be introduced into any funding plan for capital projects. Once that is done, the cost/benefit analysis might well suggest that a PFI is the least favourable option, both in time cost and transferred risk cost, of any of the funding options available to higher education institutions.

David Halton Deputy director Nene College of higher education

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