Council faces £7.6m bill over failed PFI school
0A council faces being trapped in a Private Finance Initiative (PFI) contract requiring it to pay £7.6m over the next 19 years if a failing school is closed.
Councillors at South Tyneside Council voted last week to proceed with the process of closing the South Shields School, run by the local authority, after it failed to find a sponsor to allow it to convert to academy status.
The council will still be liable for costs of more than £400,000 a year for the next 19 years to pay off the PFI used to build the school, which was signed in 2011.
A council spokesperson said: “The school was built under the Private Finance Initiative (PFI) in September 2011 and therefore has a number of years remaining on the contract.
“Currently the local authority and the school fund the PFI costs and these will need to continue to be met for the remainder of the contract.
“No decision as to the future of the school site has been made and this will not be considered until the outcome of the consultation process is finalised.”
