Wirral Services

The debate over the Wirral Council’s Strategic Asset Review has been backward looking. I much prefer to look to the future to see how common services might best be provided.

The Government is committed to a programme called “Building Schools for the Future”. The aim is that every secondary school will either be rebuilt or significantly repaired and brought up to standard over fifteen investment waves. We will be getting our share of this programme in Birkenhead and I am anxious that the local authority thinks imaginatively how their services might be delivered from a new system of schools that are community based and are open from 12-14 hours a day.

It all sounds fine, but here is the possible hiccough. Most of this programme will be financed by what are called PFI contracts. Money is borrowed from the private sector and paid back over twenty or twenty-five years.

It was mentioned on the BBC at the weekend, then in the Financial Times, that there may be severe difficulties is raising this capital to pay for Building Schools for the Future. It is because I was worried about what would be the impact of the recession that I was anxious that the first parts of our programme were signed up and agreed.

When Labour came to power in 1997, I argued (if that is not too strong a word) with Gordon Brown that pension funds needed some long term bonds of fifty years of more, and why didn’t the Government issue these bond specifically designed to balance portfolios of pension funds.

The argument was squatted on the grounds that the debt would appear on the public balance sheet. It does not now appear on the balance sheet, but it is, as we will realise only too soon, part of the public debt.

I therefore argued that, if the aim was to keep things off the balance sheet, then surely a Labour government would go down the road of allowing local authorities to issue bonds. The great reforming mayor of Birmingham, Joe Chamberlain, largely financed the rebuilding of his city by the issue of bonds.

Bonds have an early claim on local authorities’ revenue. There is not much risk attached to them. Furthermore, pensioners and others are always trying to seek safe havens for their funds with reasonable returns, and never more so than today.

If the PFI programme goes up in smoke I will be pressing the Government to allow local authorities to raise capital by their own bond issues.

When I last asked, Wirral’s PFI programme was being repaid plus 16.3% interest as well as management charges. No-one could tell me what these management charges were!

In today’s climate anyone with savings would be jolly pleased to get a safe haven promising a 5% return.

So who knows, we may see over the next five to ten years a total rebuild of our schools, the schools to be used as centres for our libraries and children’s services, and financed by Wirral bonds paying modest but much sought after rates of interest.

That is my take on the Strategic Asset Review and the fine old financial mess into which the Government has helped land our beloved country.

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