The cost of building the schools by the conventional funding methods would have been £137 million – but the council claims it is not possible to compare the total cost as the private package includes maintenance and running costs for three decades.

Alpha Schools (Highland) Ltd, a consortium of Morrison Plc and Noble Fund Managers, has just completed the controversial PPP2 building programme.

It involved building Millburn Academy, Inverness, at £29m; Dingwall Academy, £28m; Portree High, £28m; Drummond School, Inverness, £14m, Kinlochleven combined Pimary and Seconday, £11.7m; Cawdor Primary, £4.7m; Culbokie Primary, £3.9m; Inverness Gaelic Medium School, £4.3m; Inshes Primary, Inverness, £6.6m; Resolis Primary £3.6m.

But council taxpayers in the Highlands will shell out £15.725 million each year for the duration of the 30-year contract which includes maintenance of the buildings, furnishings and running costs. Already the council is paying £3.065m a year to Community Schools (Highland) Ltd for four schools built at a cost of £17m under an earlier 25-year PPP contract.

The total cost to the council has emerged in a report to the authority's audit and scrutiny committee.

But Highland Solidarity Party spokesman Steve Arnott – a persistent critic of the private funding arrangements for education and health facilitices – this week accused the council of mortgaging future generations of Highlanders to service the debt.

"They will be paying this debt for decades to come," he said. "Part of the appeal of PPPs and PFI's was by bringing in the private sector to deliver these contracts because it didn't have to appear on the government's balance sheet.

"But EU regulations from April demands that they are shown on the balance sheet and only then will we get the true scale of the national debt.

"There are certain fundamental questions: What was the actual cost of building these schools? How much would it have cost to have gone down the normal route of council borrowing? And how much profit from council taxpayers and our children's education will be paid in dividends to the shareholders of these companies?"

As part of the school deals, the buildings are also available for community use and, at the end of the contract, they will be handed over to the council.

The Scottish Government has already acknowledged that PPPs are expensive and a wasteful use of resources and has launched the Scottish Futures Trust Initiative to provide infrastructure in a more cost effective way.

Mr Arnott said the latest contract was costing the taxpayer more than £56 million per school.

"The whole PPP thing is financial madness. They have put councils and health boards into hock for the next 30 years.

Millburn Academy, Inverness; one of the schools built by Alpha Schools.

"The SNP has introduced a scheme which removes the profit element but I don't understand why they don't go back to borrowing from the Public Sector Board.

"The schools look flashy but it's a moot question as to what they will be like in 30 years' time."

Chairman of the audit and scrutiny committee, SNP councillor Jean Urquhart, acknowledged that the council was now committed to these charges for the next 30 years.

"Councils are constantly being asked by the government to look at efficiencies and ways to make savings. But this is one area we will not be able to make any savings on," she said.

"The SNP recognised the PFI's were very expensive and it is for that reason we have set up the Scottish Futures Trust Initiative."

A Highland Council spokesman said 38 per cent of the unitary charge on both contracts was being met in revenue support by central government.

"The amount for both unitary charges, which have a high degree of certainty, are included within the council's budget and are therefore within the current level of council tax."

He added the capital cost of building the schools by the conventional funding methods would have been £137m, but it was not possible to compare the total cost including maintenance and running costs over 30 years.

Highland Labour MSP Peter Peacock, a former Scottish education minister, commented: "I read wholly spurious and uninformed comment of PPP schools all the time. For the first time in our history, if something goes wrong with a school building it is the private sector that pay for it, not the council."

Highland education, culture and sport chairman Bill Fernie said PPP was the only option available at the time. He added: "We could have built fewer schools under the traditional funding route."

d.wilson@highland-news.co.uk

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