North Ayrshire Council has spent £1.7m over the past six years on ‘indexation’ charges related to the local authority’s controversial Schools PPP (Public Private Partnership) Project.
describes the amount by which a sum changes and, with regard to the
North Ayrshire PPP Project, refers to additional payments made every
year to the private consortium that won the contract to build four
schools. The figure represents an annual increase applied to the ‘base
unitary charge’ agreed as part of the contract, signed in 2006, but the
Council receives absolutely nothing in return.
figure was revealed at last week’s meeting of North Ayrshire Council in
response to a question tabled by Ardrossan’s Independent councillor John
The contract for the Schools PPP Project was signed by
Labour councillors in North Ayrshire’s previous administration, which
was voted out of office in May 2012. However, as the contract to build
and maintain four schools has a duration of 30 years, the Council’s
current SNP administration has been left to deal with the consequences
of Labour’s actions.
Prior to being elected in 2007, John
Hunter and his fellow Independent Ronnie McNicol (Saltcoats &
Stevenston) helped lead the Laighdykes Residents Group, which campaigned
against the Labour councillors’ plan to build a new school on
Laighdykes Playing Field. The Group also opposed PPP contracts in
general, highlighting the potential for private contractors to make
excessive profits from the public purse.
Labour councillors ignored public opinion and pressed ahead with a PPP
contract that early figures showed would cost local taxpayers in the
region of £380m. However, John Hunter’s question has now revealed that
the amount the Council will be forced to pay-out in relation to the
controversial PPP contract will continue to rise. In total, indexation
payments alone over the past six years have cost the local authority
Replying to Cllr Hunter at last week’s meeting,
Cllr Ruth Maguire, SNP Cabinet member for Finance, Corporate Support and
Housing, confirmed the local authority receives nothing in return for
the increased payments, saying, “Indexation is a contractual
requirement, which does not result in any additional services.”
‘contractual requirement’ of indexation, agreed by Labour councillors,
will see North Ayrshire Council continue to fork-out increased payments
every year for the 24 years that remain of the Schools PPP contract. In
the last financial year alone (2013/14) the additional ‘indexation’
payment cost local taxpayers £250,193.
John Hunter told
the3towns, “It seems from the figures given in response to my question
that the cost to the Council, and local people, will rise inexorably.”
senior Labour representatives who played a significant part in agreeing
and signing the Schools PPP contract are still serving North Ayrshire
councillors. Peter McNamara (Ardrossan & Arran) leads the Labour
Group, while David O’Neill (Irvine West), the Labour Leader of the
Council when the contract was signed, is now also President of the
Confederation of Scottish Local Authorities, making him Scotland’s most
senior elected councillor.