PFI contract termination could save £2million each year

Caerphilly county borough council looks set to save up to £2 million per annum after agreeing to withdraw from a long-standing contract which involves private companies providing support services at two key schools within the area.

Caerphilly county borough council looks set to save up to £2 million per annum after agreeing to withdraw from a long-standing contract which involves private companies providing support services at two key schools within the area.

Lewis School Pengam and the Gelihaf Site of Ysgol Gyfun Cwm Rhymni were originally built as part of a Private Finance Initiative (PFI) back in 2001. This type of PFI contract enables projects to be delivered via a partnership arrangement between a local authority and private investors.

Although there are still 9 years left to run on the original PFI contract, the council has identified that key benefits will be gained by terminating the contract early.

The decision relates to the provision of building maintenance, cleaning, catering and grounds maintenance services at the schools.

“It is important to note that this decision affects specific support services and that all other aspects of teaching and learning will remain unaffected,” said Cllr Carol Andrews, CCBC Cabinet Member for Education.

“Our staff remain committed to working in partnership with both schools over the coming months, as the finer detail of the new arrangements are developed. The saving generated by the termination will also help reduce the financial burden on our school estate as a whole over coming years,” she added.

The Welsh Government has requested that all councils in Wales with PFI contracts review them to assess whether they continue to offer value for money.

The council has identified significant financial benefits to this decision and early indications are that the budget savings for the council could be around £2million per annum. 

Credit to Caerphilly County Borough Council for Supplying the above post.