Record profit for Borders PPP schools provider

by LESTER CROSS

The partnership in charge of a 31-year Private Finance Initiative [PFI] which procured three secondary schools for Scottish Borders Council has revealed its highest ever annual operating profit while the contribution from local taxpayers is set to increase by over 20 per cent in the current financial year.

Scottish Borders Education Partnership, a Luxembourg-controlled entity, manages and services educational establishments in Duns, Earlston and Eyemouth under the agreement, signed by councillors in 2007 and which runs until 2038. The schools became fully operational in 2009.

Accounts for 2020, filed by the Partnership's directors at Companies House show a profit of £1.425 million was made last year despite the presence of Covid 19. It means that since the initiative was launched SBEP has racked up total surpluses of £10.576 million. according to figures contained in successive annual reports.

In a reference to Covid, the annual report states: "The FM (Facilities Management) contractor continues to provide essential services. There has been no financial or operational impact on the company due to Covid 19". In fact turnover at £5.177 million was well up on the £3.837 million logged in 2019.

The Partnership was able to pay dividends of £197,000 to its parent company. The Borders operation is 100% owned by BBGI Investments SCA.

According to the accounts document: "The project continues to perform generally in line with the modelled expectations and management of the scheme both logistically and financially remains under control. The directors remain confident the company will maintain the current level of performance and keep meeting the obligations under the contract".

Meanwhile, Scottish Borders Council's unaudited accounts for 2020/21 show how payments for the schools continue to spiral with another significant increase during 2021/22. 

This year the total bill will be £13,944 million - £5.727 million for services; £5.021 million for reimbursement of capital expenditure; £3.202 million for interest charges.

The equivalent figures for 2020/21 required a total payment of £11.457 million - £5.401 million for services; £3.226 million for reimbursement of capital expenditure; £2.830 million for interest charges. That means there has been a £2.487 million hike in PFI payments in a single year, equivalent to 21.7%.

Back in 2014/15 the total amount required to meet PFI commitments was £8.296 million (£5.520 million for services and capital expenditure reimbursement, and £2.776 million to cover interest).

A report published in 2018 claimed PFI debt for the British taxpayer was more than £300 billion for infrastructure projects with a value of £54.7 billion.

And figures published in the same year suggested the total annual amount Scottish local authorities were paying for legacy PFI schools schemes had reached £434 million - a sum equivalent to almost ten per cent of the nation's schools budget.

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