Catherine Delahunty

No return on PPP investment

by Catherine Delahunty

John Key’s Government is poised to start tendering for public private partnerships (PPPs) to build and run our schools.

I’ve said before what a terrible idea this is – overseas research suggests that no matter how you cut the PPP cake, the public ends up funding the projects while the private companies cream profit off the top. And there are plenty of horror stories about mismanagement of PPP education contracts overseas.

Now Radio NZ has unearthed the Government’s business case for PPPs with an official information request. It shows that it would cost $6m to set up and develop a framework for PPPs, but only save about $800,000 over 30 years. At that rate, we’d break even in the year 4300!

There are considerable risks involved, like the fact that private companies could end up deciding how school buildings are used outside of school hours, and the fact that the Ministry of Education doesn’t have the capacity to actually run or administer these PPPs.

Meanwhile we could have invested that money in early childhood health and education, for an exponential return.

Unfortunately, this Government doesn’t take any notice of trivial things like whether there’s a positive return on its investments. We know this because they’re spending $6b on motorways that will have a negative return. PPPs in schools is another example of an ideological policy they’re pursuing for its own sake, without regard for its actual impact.

Every child deserves a great education – that’s why we need a fair, well-resourced public education system. PPPs take us in the opposite direction, and will widen the educational gaps between the kids who have the most and the kids who need the most even further.

Published in Economy, Work, & Welfare | Media | Society & Culture by Catherine Delahunty on Wed, February 2nd, 2011   

Tags: , ,

More posts by | more about Catherine Delahunty