The company behind the largest schools Private Finance Initiative (PFI) contract in England is going into liquidation, heightening concerns that 88 schools in Stoke-on-Trent could be left with unfinished building work and repairs.
Schools in the city have paid Transform Stoke Schools Ltd (TSSL) to keep their buildings in good condition over the course of a 25-year contract that expired on 25 October.
In a letter seen by the , the chief executive of Stoke-on-Trent City Council told schools TSSL was going into Creditor Voluntary Liquidation – meaning its directors are taking steps to close it down.
The council told the its priority was ensuring children have safe, high-quality buildings.
The council made clear as the contract drew to an end in late October that not all repairs would be finished, and said it was working with the main contractor to ensure work continued.
Now the letter sent to schools this week says some suppliers may not have been paid and unfinished works not “fully and satisfactorily completed”.
Warranties for some work that has been done have not yet been obtained.
In February, the reported concerns that TSSL would walk away at the end of the contract leaving schools with large repair bills.
The investigation revealed almost half the schools have been withholding payments on the contract because of disputes over outstanding work and concerns about the quality of some repairs.
Gareth Snell, Labour MP for Stoke-on-Trent Central, told the it was “extremely disappointing but entirely unsurprising that TSSL is walking away from the commitments they made”.
He also said there were “serious answers needed over the oversight of the contract” by the city council and schools had questions over “when work will be finished, how it is being paid for and who will make sure the buildings used to teach our children are in good condition”.
The PFI contract – under which a private company is paid to maintain buildings – in Stoke-on-Trent is the first of dozens of similar deals across England which are due to expire in the coming years.
Stoke-on-Trent City Council told the it wanted to reassure schools and parents that it had planned for the possibility of TSSL going into liquidation, holding back money and setting aside £3.5 million.
The council said it planned to work with schools to get a clear list of outstanding work.
“Our commitment remains to deliver the best possible outcome and ensure that children in Stoke-on-Trent have safe, high-quality school environments,” it said.
In the longer term, the council said a full evaluation of the contract would be needed.
The has asked the directors of TSSL for a response to the concerns.
What happens in Stoke-on-Trent will have implications for dozens of similar PFI deals, many due to come to an end from 2025 onwards.
In 2020 the National Audit Office warned that without preparation for contract end “there is a significant risk that vital infrastructure such as schools and hospitals will not be returned to the public sector in the right condition and taxpayers and service users will bear the brunt of additional costs”.