Friday, 28 February 2014

Council forks-out £1.7m - for nothing

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.

Indexation 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.

The shocking figure was revealed at last week’s meeting of North Ayrshire Council in response to a question tabled by Ardrossan’s Independent councillor John Hunter.

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.

North Ayrshire’s 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 £1,770,193.

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.”

The ‘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.”

Two 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.

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