New Portobello High School- Where and how?
I've already warned the authors of this leaflet that not only am I hosting it, I'm going to pass back a list of errata (is that the right word & tense ?) and will be expecting a revised leaflet.seanie wrote:Why thank you Dadaist.
But to remain vaguely on topic I’m also worried by the SSP’s claim that three local authorities have rejected PPP. I don’t know what West Dunbartonshire currently has in place but as far as I’m aware both Argyll & Bute and Falkirk are pioneering new PPP funded school programmes.
And since the proposals for Portobello don’t involve PPP it’s difficult to see the justification for claiming that the schools would be built to the same standard as shoddy PPP schools.
As regards the councils mentioned, as far as I know, Falkirk and Argyll & Bute are using a new procurement procedure via NPDO's .
But NPDO’s are still PPP projects.
The financing still comes from the private sector. And that private sector expects and receives a healthy return on their investment. The difference is in how that capital is distributed. Hence the name. Non-Profit Distribution Organisations.
Under normal PPP the council signs a contract with the PPP consortium. That consortium is know as an SPV (special purpose vehicle). It consists of the various private companies involved in procuring the project; the lenders supplying the capital, the contractors building the building, the facilities managers and service contractors involved in its running etc. Now all those private sector companies are seeking to make a profit within that framework. But the SPV itself is seeking to make a profit. It’s a company with shareholders and dividends to pay. And in order to maximise shareholder return there’s huge commercial pressure to cut costs. That’s contributed to the quality problem already discussed.
NPDO’s are a fledgling attempt to reduce that problem by having the council set up the SPV itself. The council doesn’t control it, it’s at arms length, but it creates an NPDO SPV. A private company that in most respects is identical to a normal PPP consortium. The difference being that the company is non-profit. Any savings aren’t transferred into dividend payments but re-invested in the project. The private sector parties to the NPDO will still seek to cut costs to maximise profits within the terms of their individual contracts, but the SPV as an entity isn’t so there’s less pressure to drive down quality.
As a procurement vehicle it’s fairly experimental. It may deliver better quality but it’s still PPP. The financing still comes from the private sector at a cost to the public purse far higher than traditional borrowing or direct investment.
If the SSP are advocating that Edinburgh follow the lead of Argyll and Bute and Falkirk then they’re advocating another form of PPP.
But NPDO’s are still PPP projects.
The financing still comes from the private sector. And that private sector expects and receives a healthy return on their investment. The difference is in how that capital is distributed. Hence the name. Non-Profit Distribution Organisations.
Under normal PPP the council signs a contract with the PPP consortium. That consortium is know as an SPV (special purpose vehicle). It consists of the various private companies involved in procuring the project; the lenders supplying the capital, the contractors building the building, the facilities managers and service contractors involved in its running etc. Now all those private sector companies are seeking to make a profit within that framework. But the SPV itself is seeking to make a profit. It’s a company with shareholders and dividends to pay. And in order to maximise shareholder return there’s huge commercial pressure to cut costs. That’s contributed to the quality problem already discussed.
NPDO’s are a fledgling attempt to reduce that problem by having the council set up the SPV itself. The council doesn’t control it, it’s at arms length, but it creates an NPDO SPV. A private company that in most respects is identical to a normal PPP consortium. The difference being that the company is non-profit. Any savings aren’t transferred into dividend payments but re-invested in the project. The private sector parties to the NPDO will still seek to cut costs to maximise profits within the terms of their individual contracts, but the SPV as an entity isn’t so there’s less pressure to drive down quality.
As a procurement vehicle it’s fairly experimental. It may deliver better quality but it’s still PPP. The financing still comes from the private sector at a cost to the public purse far higher than traditional borrowing or direct investment.
If the SSP are advocating that Edinburgh follow the lead of Argyll and Bute and Falkirk then they’re advocating another form of PPP.
Agreed on all points. One of the reasons I'm for the plan is that it's *not* PPP.seanie wrote:Why thank you Dadaist.
But to remain vaguely on topic I’m also worried by the SSP’s claim that three local authorities have rejected PPP. I don’t know what West Dunbartonshire currently has in place but as far as I’m aware both Argyll & Bute and Falkirk are pioneering new PPP funded school programmes.
And since the proposals for Portobello don’t involve PPP it’s difficult to see the justification for claiming that the schools would be built to the same standard as shoddy PPP schools.
There may be many flaws with the leaflet and the party - but I'll tell you this for nowt - they are hammer and tongs (or should that be hammer & sickle) against PPP and have been since formation.If the SSP are advocating that Edinburgh follow the lead of Argyll and Bute and Falkirk then they’re advocating another form of PPP.
You can accuse them of a bunch of things but they have always recognised PPP for exactly what it is.
Good on 'em. But they don't appear to have recognised what's going on in Falkirk.Dadaist wrote:You can accuse them of a bunch of things but they have always recognised PPP for exactly what it is.
From the introduction;
The schools will be procured under the Scottish executive’s PPP programme, although the Council intends to use a clear variant of this known as the Non Profit Distributing Organisation (NPDO) model.
At each site, surplus land has been identified for residential development which will provide capital receipts to assist in funding the project.
As part of the procurement process, outline planning permission has been secured for the four replacement schools and the four associated housing sites.
Well it is true that many LA's are rejecting PPP where they can. Sometimes that's not possible but sometimes that's actually forced upon them due to the shrinking PPP market.
But in finding alternatives to PPP none of these councils are receiving public funding to make up the shortfall. They're having to realise assets, use Section 75 agreements to generate funding from private development, inject some capital revenue, and hope a bit of "prudential" borrowing might help.
That's the financial reality as things currently stand. I wish it wasn't but it is.
But in finding alternatives to PPP none of these councils are receiving public funding to make up the shortfall. They're having to realise assets, use Section 75 agreements to generate funding from private development, inject some capital revenue, and hope a bit of "prudential" borrowing might help.
That's the financial reality as things currently stand. I wish it wasn't but it is.
Argyll & Bute.
I can't say it inspires confidence in the SSP's other claims.A number of authorities are pursuing the PFI model for the upgrade of their schools. However, despite the obvious benefits noted above, some concern has been expressed about PFI schemes. These concerns led Argyll and Bute Council to pioneer the development of a Non-Profit Distributing Organisation (NPDO) model. It is important to note that the NPDO is a type of PPP – it is a private sector entity and is operated on a commercial basis.
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Alison Connelly
You're wrong.
Prudential borrowing does allow LA's more freedom to take investment decisions but it does not allow them to generate the kind of sums required for a project of this nature. Because the amount they can borrow is limited by the "prudential" framework. That framework is hugely complex but the ultimate arbiter of what is "prudential" is central government. And central government does not want Councils embarking on a public borrowing spree.
It's complex, and can be used creatively, but the scope for prudential borrowing is pretty much as I've outlined. The amount that can be borrowed is usually based on a calculation of repayments set against long-term savings. It's not determined by project costs.
The council could try to borrow £40 million. But it'd be vetoed by Central Government.
Prudential borrowing does allow LA's more freedom to take investment decisions but it does not allow them to generate the kind of sums required for a project of this nature. Because the amount they can borrow is limited by the "prudential" framework. That framework is hugely complex but the ultimate arbiter of what is "prudential" is central government. And central government does not want Councils embarking on a public borrowing spree.
It's complex, and can be used creatively, but the scope for prudential borrowing is pretty much as I've outlined. The amount that can be borrowed is usually based on a calculation of repayments set against long-term savings. It's not determined by project costs.
The council could try to borrow £40 million. But it'd be vetoed by Central Government.
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Alison Connelly
I can't find a neat definition of Prudential Borrowing, but here's a simplified outline. It specific to England but Prudential Borrowing is similar in principle up here.
The "prudential" framework essentially gives Local Authorities the freedom to borrow whatever they like. On the condition that the borrowing is expenditure neutral (or thereabouts). Which represents a huge constraint in that freedom to borrow.
"Prudential Borrowing" is unsupported borrowing, so LA's have to justify the additional burden of repayments by finding commensurate savings somewhere.
See the point about setting borrowing costs against savings?You should exercise caution because of the long-term financial consequences for your budgets. You need to:
Consult your local Schools Forum.
Have good reasons to believe that your revenue savings will be more than your borrowing costs.
Be able to demonstrate to the Secretary of State how much you will save.
The "prudential" framework essentially gives Local Authorities the freedom to borrow whatever they like. On the condition that the borrowing is expenditure neutral (or thereabouts). Which represents a huge constraint in that freedom to borrow.
"Prudential Borrowing" is unsupported borrowing, so LA's have to justify the additional burden of repayments by finding commensurate savings somewhere.
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Alison Connelly
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Stephen McIntyre
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Erm, there is a significant difference. Portyman quoted from the wrong local plan claiming that "it seems pretty clear to me". He then quoted an English source of "opinion" as if it was de facto law here in scotland and he was quite aggresive about it too.Alison Connelly wrote: There are other examples on this forum of people quoting regulations which are relevant to England or other parts of Edinburgh, and they have been ripped to shreds!!
Seanie, on the other hand precursed his source saying "Its specific to England but Prudential Borrowing is similar in principle up here. " In other words he is acknowleding there may be differences.
Portyman didn't get ripped to shreds. Wangi asked what relevance an english website had to scottish law. Portyman countered with his usual response when asked a direct question; he simply ignored it.
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Stephen McIntyre
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seanie wrote:. On the condition that the borrowing is expenditure neutral (or thereabouts). Which represents a huge constraint in that freedom to borrow.
Alison Connelly wrote: The Prudential Code does not make this condition. As I have already said it considers affordability, prudence, value for money, stewardship of assets, service objectives and practicality.
To me these statements are most likely consistent and complementary. So as Alison states: having considered; affordability, prudence, value for money, stewardship of assets, service objectives and practicality there is still a condition that the borrowing is expenditure neutral (or thereabouts), as Seanie states.
From the Societyguardian 8th December 2003
"For smaller capital projects, there will be much attention on the new "prudential" borrowing powers available to local authorities, and NHS foundation trusts which will be given the freedom to raise limited amounts of cash privately under "earned autonomy" arrangements."
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Stephen McIntyre
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Examples of how Prudential borrowing has been used to date. £43m for two schools doesn't seem to fit.
Birmingham City Council has raised more than £30m this financial year and expects to raise even more next year. Loans have been used for home improvements, for new children’s homes and to support the general capital budget. The council expects departments to put forward increasing numbers of schemes that are self-financing as ‘spend to save’. Birmingham might consider bond issues at some point if a major infrastructure requirement came up, but at present it meets most of its needs through the Public Works Loan Board, with some coming from the market via an appointed broker.
Bournemouth Borough Council is redeveloping its conference centre, with 82% of the £21m refit coming from prudential borrowing, to be repaid over at least 15 years. The balance of the funding is coming from the council and the regional development agency. Aims include the provision of a further 4,700 jobs by boosting the turnover of the centre by 50% and creating a 200-bedroom, four-star hotel next to the centre.
Derbyshire County Council is borrowing £750,000 to buy a residential property for conversion to a care home for young people. Buying is cheaper than a new build option and will save £134,000 per year on existing external provision, while improving the quality of support for the young people.
Glasgow City Council is borrowing £19m to help rationalise its primary, nursery and special needs schools. This is backed by £23m from the council’s capital fund and £7m from capital receipts. The scheme will achieve £1.9m in annual revenue savings.
Norwich City Council is borrowing £6.75m to build a new car park, to replace some of the car parking spaces lost when two multistorey facilities were demolished for structural reasons. The new car park will provide a net contribution to the council’s general fund within two years. The government had refused requests for supplementary credit approvals and the council had little prospect of accumulating sufficient capital receipts to self-fund the scheme.
The London Borough of Waltham Forest is borrowing up to £15m for repayment over three years to buy sites to build new schools on, with the capital to be repaid after the old school sites are sold. The saving achieved from not having to be build new schools on existing sites is estimated to be at least £4m.
Woking Borough Council is raising £62m to set up its own development company. The council had budgeted to spend £42m to meet the decent homes standard for its 3,500 existing houses, but was allocated just £3m by its regional housing board. It plans to provide an extra 100 homes for rent per year until 2006/07 through building and buying, with another 88 homes to be built by registered social landlords. A quarter of the borrowing will be spent on buying vacant properties.
Birmingham City Council has raised more than £30m this financial year and expects to raise even more next year. Loans have been used for home improvements, for new children’s homes and to support the general capital budget. The council expects departments to put forward increasing numbers of schemes that are self-financing as ‘spend to save’. Birmingham might consider bond issues at some point if a major infrastructure requirement came up, but at present it meets most of its needs through the Public Works Loan Board, with some coming from the market via an appointed broker.
Bournemouth Borough Council is redeveloping its conference centre, with 82% of the £21m refit coming from prudential borrowing, to be repaid over at least 15 years. The balance of the funding is coming from the council and the regional development agency. Aims include the provision of a further 4,700 jobs by boosting the turnover of the centre by 50% and creating a 200-bedroom, four-star hotel next to the centre.
Derbyshire County Council is borrowing £750,000 to buy a residential property for conversion to a care home for young people. Buying is cheaper than a new build option and will save £134,000 per year on existing external provision, while improving the quality of support for the young people.
Glasgow City Council is borrowing £19m to help rationalise its primary, nursery and special needs schools. This is backed by £23m from the council’s capital fund and £7m from capital receipts. The scheme will achieve £1.9m in annual revenue savings.
Norwich City Council is borrowing £6.75m to build a new car park, to replace some of the car parking spaces lost when two multistorey facilities were demolished for structural reasons. The new car park will provide a net contribution to the council’s general fund within two years. The government had refused requests for supplementary credit approvals and the council had little prospect of accumulating sufficient capital receipts to self-fund the scheme.
The London Borough of Waltham Forest is borrowing up to £15m for repayment over three years to buy sites to build new schools on, with the capital to be repaid after the old school sites are sold. The saving achieved from not having to be build new schools on existing sites is estimated to be at least £4m.
Woking Borough Council is raising £62m to set up its own development company. The council had budgeted to spend £42m to meet the decent homes standard for its 3,500 existing houses, but was allocated just £3m by its regional housing board. It plans to provide an extra 100 homes for rent per year until 2006/07 through building and buying, with another 88 homes to be built by registered social landlords. A quarter of the borrowing will be spent on buying vacant properties.
I highlighted the context of the source.Alison Connelly wrote:There are other examples on this forum of people quoting regulations which are relevant to England or other parts of Edinburgh, and they have been ripped to shreds!!
Edinburgh Councils governed by the Local Government in Scotland Act 2003, and there are differences. One important one is that the primary relationship with "central government"(your term from an earlier quote) is with the Scottish Executive, and not ODPM (the department which deals with English LAs). Have you heard of devolvement?
And since you cited CIPFA Alison, let’s see what they’ve said about the differences between Scotland and England in their [url=http://www.cipfa.org.uk/pt/download/pru ... idance.pdf]“Prudential Code: Preliminary Guidanceâ€
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Bob Jefferson
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Stephen McIntyre
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To put the large sum of money into context it is 1/6th of the annual capital expenditure budget for Childrens and families 2006/7.seanie wrote:.
To take out a £40 million loan over 30 years, I’d expect the annual repayments to average over £5 million. That’s a large sum of money. That’s the cost of a new primary school.
Seanie your answer is well researched and concise. May I check my understanding by relating the concept to our imminent need. Please correct me if I err.
If the entire cost of the schools is to be funded by PB. Then the annual loan payments, which you calculate as £5M, would have to be made from annual cost savings in the running of St Johns and Portobello. So, if it costs £5m per annum to run the schools at the moment. The council would have to illustrate that they could run the schools at zero cost before permission to borrow is given?
I don't think it's as straightforward as that. My understanding is that the details of the prudential framework is pretty complex. Fiendishly so.
Prudential Borrowing was intended to give LA's more flexibility. It certainly wasn't intended, nor does it allow, Councils to go on borrowing sprees. There are onerous restrictions.
The English quote that I gave earlier?
Central Government is (fairly) relaxed about Local Authority borrowing only on the condition that it's more or less expenditure neutral. As long as the Councils are not taking on additional financial burdens they can probably go ahead.
As to how much it might contribute I wouldn't like to guess. They can probably obtain some money but the amount really isn't determined by the Council. It's similar to the point I made earlier about the amount you could borrow not being tied to project costs. The Council couldn't decide how much to raise via prudential borrowing. The amount that could be borrowed would be determined by the prudential framework.
You'd have to run figures within the context of the framework and see what came out.
Prudential Borrowing was intended to give LA's more flexibility. It certainly wasn't intended, nor does it allow, Councils to go on borrowing sprees. There are onerous restrictions.
The English quote that I gave earlier?
That's a pretty good rule of thumb. Once you've gone through all the guff about affordability, prudence, value for money, stewardship of assets, service objectives and practicality, that's what it eventually boils down to.Have good reasons to believe that your revenue savings will be more than your borrowing costs.
Central Government is (fairly) relaxed about Local Authority borrowing only on the condition that it's more or less expenditure neutral. As long as the Councils are not taking on additional financial burdens they can probably go ahead.
As to how much it might contribute I wouldn't like to guess. They can probably obtain some money but the amount really isn't determined by the Council. It's similar to the point I made earlier about the amount you could borrow not being tied to project costs. The Council couldn't decide how much to raise via prudential borrowing. The amount that could be borrowed would be determined by the prudential framework.
You'd have to run figures within the context of the framework and see what came out.
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Stephen McIntyre
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I think we can get devolvement, peerages and New Labour all working together to fund the new school.
It's simple.
Just build a fake "school" on the site of the golf course - like the pretend town in "High Plains Drifter" then get New Labour Peer Lord Watson (MSP) to burn it down so we can claim £43m on the insurance.
We can also get him to use that favourite tactic (allegedly) of those who wish to see an existing property rebuilt somewhere else so that a site can be developed - and torch the golf club building too!
Problems solved.
It's simple.
Just build a fake "school" on the site of the golf course - like the pretend town in "High Plains Drifter" then get New Labour Peer Lord Watson (MSP) to burn it down so we can claim £43m on the insurance.
We can also get him to use that favourite tactic (allegedly) of those who wish to see an existing property rebuilt somewhere else so that a site can be developed - and torch the golf club building too!
Problems solved.
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Jean Douglas
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Thanks, Dadaist, for your kind words of encouragement. At present I have had my say, and I've not changed my opinion. I will continue to read the posts but do not have the time (my life is busy!) to keep repeating myself, or play the gamesDadaist wrote:Jean - welcome
You're doing well talking to 4 of our regular posters (including 2 administrators) simultaneously!
Don't be disheartened when Stephen Mcintyre starts using words like "desperation" on you - stick to your guns.
One of the things you may be attacked on is use of language as opposed to its content. People might try and trip you up or make it look like you have contradicted yourself - but don't worry - even if you do, it doesn't mean that your other points are invalid.
Watch out for people trying to steer the topic, distract you with nit-picking or simply ignore things you've said or questions you have asked.
An example would be constantly forcing you to come up with an alternative solution when all you were doing was pointing out your opposition to the current one. Don't if you don't want to - after all, you're just an individual and not the council!
One really interesting thing to do is look back over what you have posted and check out not the things which have been attacked (which were the weak points which people go for automatically) but the things which were ignored outright - for example (and correct me if I'm wrong) your point about the morality of exploiting a legal loophole to be able to build on the land - this got an audible groan from a large number of people at the infamous "hijacked" meeting - maybe you were there.
I'm sure you will appreciate that you have a vocal and intelligent opposition who could use a variety of tactics to dishearten, undermine credibility, distract, distort or any number of argumentative tactics, or perhaps accuse you of using them yourself.
I don't support your view, but when I log on here and see someone taking on all-comers, I feel that they deserve a note of support!
If I have anything else to say, I will come in. Meantime I am hoping that something new will come from the meeting at Towerbank this evening, which will inject some fresh life into what, I find, is a rather repetitive(though entertaining
) forum. 
No worries Jean.
It's amazing all the things that the "anti" crowd just aren't allowed to mention - it's like the argument has been shut down.
For anyone new to the argument - here is a brief guide as to how one should dare be against the plan in this environment :
1. You can't mention anything to do with morals - you have to get with reality. And anyway - how dare you compare a view, or golf, to education!
2. You can't mention losing green space - because you will have it pointed out to you that on balance you're not! Oh - you meant *that* green space in particular? No, not good enough.
3. You can't mention central government, the parly, the exec or even other bits of Edinburgh - it's like we're in a bubble. Never mind all these outfits are run by New Labour - your point is irrelevant to this topic.
4. You can't mention council policy anywhere else in Edinburgh, cos it doesn't apply here.
5. You can't simply oppose something because - er - you don't like it. You must come up with an alternative. And there are no alternatives, so there.
6. If you live nearby, you can't say anything because you're a nimby. Charming. Oh unless you support the plan.
Be sure not to mention any of the above points at a meeting because you must be a hijacker!
It's amazing all the things that the "anti" crowd just aren't allowed to mention - it's like the argument has been shut down.
For anyone new to the argument - here is a brief guide as to how one should dare be against the plan in this environment :
1. You can't mention anything to do with morals - you have to get with reality. And anyway - how dare you compare a view, or golf, to education!
2. You can't mention losing green space - because you will have it pointed out to you that on balance you're not! Oh - you meant *that* green space in particular? No, not good enough.
3. You can't mention central government, the parly, the exec or even other bits of Edinburgh - it's like we're in a bubble. Never mind all these outfits are run by New Labour - your point is irrelevant to this topic.
4. You can't mention council policy anywhere else in Edinburgh, cos it doesn't apply here.
5. You can't simply oppose something because - er - you don't like it. You must come up with an alternative. And there are no alternatives, so there.
6. If you live nearby, you can't say anything because you're a nimby. Charming. Oh unless you support the plan.
Be sure not to mention any of the above points at a meeting because you must be a hijacker!
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Stephen McIntyre
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Bob Jefferson
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From today's EN:
Schools plan flies in face of public opinion on parks
Oolah, I'm one of the 85%. I believe our parks are very important and I spend much of my leisure time in parks, locally and further afield. I'm disappointed to be missing the annual clean-up of Rosefield Park, which takes place this Saturday if you or anyone else is interested.
However, I have to confess that after 13 years I have never set foot on Portobello Park because actually it's pretty featureless and boring. In fact, that's not quite true - I once watched my son play football there and I'm delighted that the pitches are remaining.
I'm not a golfer but I'm delighted that you are getting a new and better course nearby, assuming you live in Portobello, and that you will have the opportunity to help design the course and perhaps be able to add facilities that you don't have at present.
I'm also delighted that the community will have access to a new park. I'm hoping, no I'm expecting, no actually I'm demanding that the Council allocates a generous budget to allow the community to create a green space that will be of much greater value than we have at present, and a park that will be enjoyed by everyone.
Schools plan flies in face of public opinion on parks
Oolah, I'm one of the 85%. I believe our parks are very important and I spend much of my leisure time in parks, locally and further afield. I'm disappointed to be missing the annual clean-up of Rosefield Park, which takes place this Saturday if you or anyone else is interested.
However, I have to confess that after 13 years I have never set foot on Portobello Park because actually it's pretty featureless and boring. In fact, that's not quite true - I once watched my son play football there and I'm delighted that the pitches are remaining.
I'm not a golfer but I'm delighted that you are getting a new and better course nearby, assuming you live in Portobello, and that you will have the opportunity to help design the course and perhaps be able to add facilities that you don't have at present.
I'm also delighted that the community will have access to a new park. I'm hoping, no I'm expecting, no actually I'm demanding that the Council allocates a generous budget to allow the community to create a green space that will be of much greater value than we have at present, and a park that will be enjoyed by everyone.
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Bob Jefferson
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I think you'll be a disappointed chap thenBob Jefferson wrote:I'm hoping, no I'm expecting, no actually I'm demanding that the Council allocates a generous budget to allow the community to create a green space that will be of much greater value than we have at present, and a park that will be enjoyed by everyone.
Enough of your nonsense - get back to the Play Pen!
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Stephen McIntyre
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It was pretty good in my view. There were some classic contributions from all sides. There.were a number of "antis" there.
In any case it could not have been "hijacked" like the golfers meeting, as it was an open meeting albeit organisede by a pro group.
No sign of Matthew but I did meet Alison Connelly, she is nowhere near as scary in real life.
In any case it could not have been "hijacked" like the golfers meeting, as it was an open meeting albeit organisede by a pro group.
No sign of Matthew but I did meet Alison Connelly, she is nowhere near as scary in real life.