£1 billion bill as Edinburgh schools remain closed

THE local authority at the centre of Scotland's unsafe schools scandal still owes more than £1bn under the controversial construction contracts.

City of Edinburgh Council has refused to pay the latest private finance initiative (PFI) charges for the 17 schools shut down last Friday because of safety fears.

As more than 7,000 schoolchildren, teachers and ancillary staff face weeks of further disruption, the council has withheld the latest £1.5m instalment of the charge after in-house solicitors advised invoking their legal rights under the PFI contract.

And yesterday data released under Freedom of Information laws revealed the local authority owes a total of £1.043bn under the 33-year contracts which funded the schools and other projects across the Capital.

The city is being charged £17.6m this year as it repays the building costs, debt financing costs and day-to-day maintenance costs, Treasury figures for the PFI contract show.

It also emerged that neither the council nor Edinburgh Schools Partnership (ESP), the company which runs the 17 PFI contracts, was told by one of its key contractors that a school it built in Glasgow had had identical problems four years ago.

About Edinburgh 7,600 pupils missed the first two days of the new term following the Easter break and most will not be back in class until next week.

Five secondaries, 10 primaries and two additional support needs schools were shut on Friday due to concerns over structural issues after a wall collapsed at Oxgangs Primary School, below, in January following Storm Gertrude.

Miller Construction, which built the four Edinburgh schools where serious safety defects have been found in brick walls, also had to repair Lourdes primary school in Glasgow in 2012 after the same defects were detected.

The firm, now owned by Galliford Try, failed to install special metal ties which either fixed the exterior brick wall to the main structural wall of the building or to the top of the wall to the roof frame.

It was a founding partner in the consortium which built or refurbished the 17 Edinburgh schools, including Oxgangs primary school where tonnes of bricks crashed into a playground during a gale in January.

Miller was also instructed to survey all the PFI schools it had built in Glasgow, but ESP has confirmed that Miller never told it that these problems had occurred. Miller Construction also "self certified" that the properties met all legal building standards, the council said.

Edinburgh's annual charges will peak at £20m in 2031, with the profits as high as £3.4m a year flowing to four major PFI investment and venture capital firms which currently own the schools and PFI contracts.

A council spokeswoman said of the withheld instalments: "We will not be paying them that this month. We're applying all the contractual terms, and those include deductions for non-availability of the schools."

Edinburgh City Council has three major school-building contracts — PPP1, under which the 17 danger schools were built, PP2 and a more recent contract for James Gillespie's High School.

The original cost of PP1 was said to be around £360m but the FOI figures, which were first released a year ago, show the full cash figure is likely to be almost £530m.

Taxpayers in the capital have already paid out almost £360m for both PP1 and PP2, with a further £1billion still to pay. The PPP2 contract is set to cost £746m in total while the new James Gillespie's project is set to cost a further £100m.