§ Mr. JenkinTo ask the Secretary of State for Education and Employment what she is doing to encourage the private finance initiative in local authority schools. [41094]
§ Mrs. GillanThe Department has been working closely with other Government Departments on possible rule changes to encourage the private finance initiative— PFI—on the basis of our contacts with individual local authorities. My hon. Friend the Minister for Local Government, Housing and Urban Regeneration is today announcing proposals from the Department of the Environment to increase the scope for upgrading local authority services through increased private sector investment and management expertise.
The proposals to generate more resources for PFI projects, by freeing up the requirement for authorities to set aside capital receipts for debt redemption, open up exciting opportunities to upgrade local authority schools. Disposal of education assets surplus to requirements will be encouraged by a reduction from 50 per cent. to 25 per cent. in the rate of set aside, for a limited period of two years from April 1996. Replacement of operational educational assets will also be made easier.
The proposals should allow both the public and the private sector to benefit from innovative programmes to upgrade the school building stock. They should also encourage local education authorities to rationalise school provision and thus remove expensive surplus places where it seems sensible to do so.