Latest council figures unearthed by the Lib Dems show a huge financial problem building up for the future over the council’s controversial schools PFI contract.

The Lib Dems say that although in the first three years of the contract (2000-2 inclusive) the council receives more money from the government for the contract than it has to pay out, this changes from 2003 onwards. For example, by 2006 the council will have had to pay out over £3 million more than it has received.

And the total gap gets worse for each year of the contract afterwards – ending up with a massive £139 million gap by the end of the deal.

The Lib Dems are pointing out that it is rather convenient that the Labour-run council received more money from the Labour governments scheme than it had to pay out in the run-up to the 2002 elections, with the bills only mounting up afterwards.

Lib Dem education spokesman Ross Laird comments:

“These figure are worrying, and show that the Labour council may have walked into a financial black hole over this PFI deal. It has the prospect of becoming an immense financial drain.”

Note:

The figures are all in cash terms rather than net present value, but even under the controversial NPV calculations, it is still the case that the council receives less than two-thirds of the money it has to pay out during the contract’s lifespan.