Following Vincent Cable's questions to the Education Secretary, Charles Clarke, and to the Richmond Council's Chief Executive, about the problems posed by the financial crisis at Jarvis, a clearer picture is emerging of the scale of the problem, says the MP.

In the borough Jarvis have seven building contracts. One - Trafalgar - is incomplete and there are serious problems with the contract, and the council is withholding payments, states Dr Cable, adding that the other buildings have been completed punctually to a generally good standard, though there are "snagging" problems.

"For these other schools - which are owned by Jarvis under the terms of the PFI contract - there is uncertainty of the future of the maintenance contracts," he continues. "The schools will be owned and managed, if Jarvis fails, by a consortium of banks and the council acknowledges that there is the possibility of delay and temporary failure of services.

"Ministers are being very tight lipped, terrified that, if they say the wrong thing, it would have legal repercussions. As a result no-one knows whether the national taxpayer or the local council tax payer will have to pick up a big bill.

"One of the worst features of PFI is that much of it is secret - 'commercially confidential' - so no-one can find out what the taxpayer is being exposed to. In my view the company should not be bailed out. But if it does go down the consequences would be very messy, locally and nationally."

Monday, July 12, 2004

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