PFI and Schools

[John Simkin]

Jarvis is a company that provides generous funds to New Labour, despite the fact that the company is headed by Steve Norris, a leading figure in the Conservative Party.

Jarvis controls about 10% of the £35.5bn PFI debt which the government has raised across the public sector. This is likely to cause problems for schools as Jarvis is on the brink of collapse with debts of £230m. It is busy trying to sell off its 120 contracts with schools. If this does not happen, schools will end up with building work unfinished. It is expected that the government will be forced bail-out Jarvis. In other words, the taxpayer will be forced to subsidize Jarvis.

The building company Ballast has just gone bust. It had the PFI contract to build schools in Tower Hamlets. The result is half-finished schools like bombsites.

The whole system is corrupt. Recently a software company ICL underestimated software costs in a £184m PFI deal with the Lord Chancellor’s Department. The government agreed to pay the money in order to guarantee shareholders’ profits.