Members of Falkirk Council’s Education, Children and Young People executive agreed on Tuesday that the council should not extend the contract it has with Class 98 Limited beyond 2025.
Falkirk Council was the first council in Scotland to use a Public Private Partnership (PPP) contract to renew some of its high schools, which means it will be the first to end.
Council leader Cecil Meiklejohn said: “Every local authority in Scotland is watching Falkirk right now – as the first PFI contract to be initiated we’re also the first to come forward for review, so all eyes will be on how we do that.”
Now, senior managers are authorised to “take all necessary administrative, technical and contractual steps to bring the contract to an end at August 1, 2025 and transfer the schools back to the council”.
The contract was entered into by the council with Class 98 Limited in 1998 and the construction of the schools – Bo’ness Academy, Braes High School, Graeme High School, Larbert High School and the Old Carrongrange School – was completed by August 2000.
Under the contract, Class 98 Limited are responsible for the management, operation, maintenance, and servicing of the school facilities so that they are available for use by the council for education and community use.
But that has proved controversial over the years.
Education and Leisure portfolio holder Laura Murtagh said there were a number of benefits to bringing the schools back under council control – and that included communities being “in greater day to day control of these facilities without additional layers of consultation and agreement”.
One of the religious representatives, the Reverend Michael Rollo said his church had experienced the high cost of using a PPP school’s facilities.
He said: “We have been utilising Larbert High School for ten years and after lockdown they quadrupled our rent – it went up from £7500 to £30,000.
“Also, we were locked out on occasions and people forgot to turn up so that was a bit of a challenge and having it back in the hands of the council for community users would be very welcome.”
The cost of the PPP funding model has also proved controversial as the capital cost of building the five new schools was reportedly £65 million – while by the end of the contract’s term, Falkirk Council will have paid Class 98 £316.4 million.
A group of council staff, Class 98 and the Scottish Futures Trust has been looking closely at the detail of what it will mean for the contracts to end.
Councillors heard they will continue to look at the costs of the project, including the transfer of 96 FTE staff under TUPE rules and ongoing maintenance.
The council will also have to pay a final £5 million – or the current market value of the schools, whichever is lower – before it owns the buildings outright.
Currently, the cost of the schools is £18 million a year, although £8.6 million is contributed by Scottish Government.
That means Falkirk Council currently pays £9.4 million towards the running of the schools every year and Gary Greenhorn, Falkirk Council’s head of planning and resources, said there is no suggestion that the council will not be able to meet the cost within that budget.