I’ve looked at PPPs. They might have their place. But it isn’t for state schools.
Our schools are already designed by the private sector. They are built by the private sector. Unlike many other countries we don’t have a Ministry of Works anymore.
The only advantage to government in having state schools owned privately is that they are off the books and our debt looks lower. Smoke and mirrors stuff.
And it costs the private sector more to borrow to finance the buildings than they state. And they have to make a profit.
So we as taxpayers pay more.
Can’t blame Infratil and the Superfund for looking to invest in this area. Very good deal for them. Money for jam. Guaranteed margin.
But lets make it clear. Labour will develop a clear policy position on this. It will involve unwinding the contracts – using legislation if necessary. As with ACC in the past and if there is another privatisation.
And my view is that policy will involve compensation for the value of the bricks and mortar but not for the overheads and tender costs.
So be warned – don’t spend up on getting these deals together.
That just seems a waste of Parliamentary time and money- the taxpayer will have to compensate the broken contracts, probably for a large sum. It would be far better for labour to take a more cost neutral approach and just let the contracts run down and do it that way
In the early 1980s, at the start of Maggie’s sell off of the public sector in the UK, the proud slogan of the footsoldiers of the Labour Party, that we used to chant at every protest rally, was “Renationalisation without Compensation”. It was a bit of a mouthful
, but we coped somehow. Although it didn’t seem to deter anyone from investing.
Having nonesense like this as a starting point meant it was almost 2 decades before the Labour Party had any chance of doing anything. And by then the majority in the ranks had realised the folly of such right-on slogans and left the chanting of them to the Trots.
Our schools are already designed by the private sector. They are built by the private sector. Unlike many other countries we don’t have a Ministry of Works anymore.
Really good point, which should have been made earlier by any competent journalist. When I heard Bill English on the radio yesterday talking about this public private partnership school idea, I couldn’t understand what he was supposing would come of it.
I was disappointed that the journalist didn’t ask for an explanation of what would be different, given schools that receive public funding while running as a private entity already exist in New Zealand.
Thanks for explaining Trevor. It sadly makes sense now.
@ Sean
Private schools actually receive very little govt funding thanks to certain political parties…, It bothered me a little bit whenever that those certain parties MPs would show up at school as if to say in support when they were forcing the parents to pay out thousands more a year for being a relief on the general school population. There are a few normalities known as “integrated” schools which are arguably private but they only receive funding because they as a private entity were unable to survive
I’m not sure that it’d benefit students (which should surely be the primary concern when it comes to how to run schools). I’m not sure of the details of how my school was run but I know that the grounds/infrastructure were privately owned while other aspects weren’t.
The upkeep was awful and whoever was in charge didn’t seem to be capable of maintaining the school, which saw conditions which often disrupted learning. My experience was that the fully state-run school down the road was a lot better for students.
@ Nichola Wood
That sounds alot like the old system of the Govt renting properties, It still goes on in some places in New Zealand much to the detriment of students, it was still a public school, just a crummy one
Stephensmikm, the point is to send a market signal to investors: don’t rely on this. This will dissuade many potential private partners, and increase costs for those who do choose to invest, due to high risk.
This is what makes it a strong political position. It should have a chilling effect on the programme while the government is trying to get it up and running, making it more likely to fail or underperform; and it provides a future Labour-led government with a chance to “right the wrong”.
L
@lew
AT the expense of taxpayers of course…
It would be better to allow for it to just be the one off – allows for money for the agreement and then Labour can turn it off if it fails by seizing any further negotiation rather than getting taken to Civil Courts for breach of contract
Great work, Trevor. A line in the sand. Real leadership. I would go further. The school will revert to the state, no compensation. Factor it into your business risk. Simple. Let’s see how big a gamblers these developers are?
Lew says: “It should have a chilling effect on the programme while the government is trying to get it up and running, making it more likely to fail or underperform; and it provides a future Labour-led government with a chance to “right the wrong”.”
So, Lew, you believe that the Labour Party should actively engage in behaviour that sabotages what the elected government is doing to the extent that the initiative fails or underperforms just so they can come in later on and appear to fix what wouldn’t be broke if it hadn’t been sabotaged in the first place. Hmm.
Would any of the MPs who frequent the blog care to either support or condemn this approach?
@george
Mint.
jennifer says: I would go further. The school will revert to the state, no compensation.
You weren’t in the UK in 1981 by any chance, were you Jennifer?
Stephen, at the expense of the taxpayers, who would be aware of the plans, meaning that Labour would only be able to form a government and enact their promise if granted an electoral mandate to do so. The system working as intended.
Not to say that there isn’t a downside — but that ain’t it. The downside is likely symbolic, as George mentions upthread: the spectre of communism, impunity, trampling on property rights, etc. Being utterly transparent and unambiguous about intentions — as Trevor has done in this post — is crucial for being able to attain a genuine mandate and inoculate against those criticisms. Ideally, a rump of nutters quoting Atlas Shrugged would be what remained once the electorate had made an informed and conscious decision.
As to your last sentence — better for whom?
L
Ah, cross-posted with George.
This isn’t sabotage — it’s a statement of intent. Just as National is free to campaign on privatisation if they want, Labour are free to campaign on dismantling privatisation agreements to the extent they are able to do so. A market signal of this sort is simply a statement of fact that the neoliberal experiment will not last for ever, and when the electorate decides they’ve had enough, anyone who’s put too much faith in the ancienne regime will need to check their premises.
L
@lew
Better for everyone – Students wouldn’t have to deal with a massive ruckess, the companies getting in on the deal would not lose out (no Jennifer – this is NZ, not Cuba) and the Government would not lose any of the money it is entrusted to use responsibly
Trevor
It’s not about academic outcomes is it – it’s all about state control and ownership. One size must fit all and if we use a big enough hammer on the students and parents rather than the administrators we can do it Labour’s way…
If you take this stance Trevor then be honest and make it an election campaign promise so people know what they are voting for – it the public vote for one size fits all education driven by ideology rather than managed for better outcomes then you can boldly be socialist and proud of it.
It would be interesting for a school to seek repairs, maintanence, and improvements from a private company out to make money for shareholders.
George says: The current elected goverment has cancelled the elected Canterbury body, and left the future costs in the hands of the rate-payers. So George you would be loud in your objections to that?
@Ianmac
Maybe they can compromise and get the children to make wallets in exchange for the Heating/AC and call it Workshop Tech
There are problems but I’d prefer to give it a chance than just shut it down with huge legal rammifications
Ianmac: George says: The current elected goverment has cancelled the elected Canterbury body, and left the future costs in the hands of the rate-payers.
Did I? Where? I don’t remember that.
So George you would be loud in your objections to that?
Can you be clearer on the point you’re making if you require a response, please, as I have no idea what you’re on about?
Stay on topic please. Clare
George, no. I was in Austin watching Reagan make the same silly mistakes these tory clowns are making. However, it is very perceptive of you to see that they are locked in some 1980s back-to-the-future time warp.
burt, not sure about how many sizes we need, and I stand to be corrected, but it’s Trevor simply saying the government should own state schools? Not sure that’s too much of a vote loser.
Normally new state schools have their land bought well in advance – or its designated at the time of development of the subdivisions- so the state owns the land.
Good to see the Labour would unwind the contracts for private buildings on public land.
Nationals proposal is too silly for words, just giving free money to ‘prime movers’ who charge hefty fees to set up these fancy deals
@jennifer
I know of at least two schools within the wellington district that currently lease their grounds to other organisations on a semi-permanent basis including teaching rooms because they 1. don’t have enough students for them, 2. Need money for the up keep of the now dilapidating schools and 3. they want to be more involved within the community, I know for a fact that at least one of these schools has been trying to actually get grant to sell some of the property for a very reasonable price, well above the market rate for the area but the law forbids them to , privatising the grounds for schools could be a good thing if a well drafted contract was in place and the schools were able to control their assets properly
Then to rephrase -
How did labour come to the decision to stop any PPP’s progress in two years+, given we do not know what the economic and social cost of doing so will be.
To be in line with other significant policies it would be pragmatic to wait and see what the effect would be before making a decision, and nobody can claim to see into the future and know this information.
Is it me or shouldn’t these types of announcements about policy direction come from the leader of the Labour Party?
Sorry George says: I was responding to your piece “should actively engage in behaviour that sabotages what the elected government is doing to the extent that the initiative fails or underperforms ……etc”
I meant that currently we have a situation whereby an elected Government is removing an elected body in Canterbury. I can see a parallel here that when elected, the new Government would remove a contract……
Would you George says, be upset about the Canterbury removal?
If a private company was to own the buildings, grounds etc, it would make sense for them to control the asset during term breaks, after 4pm and at the weekends, and use the asset for profit.
I wonder how this would work with all the education staff who work during term breaks, over the weekends, into the evenings and sometimes into the early hours of the morning. Some on salaryies,but many without pay.
@ stephensmikm, sounds like that loony Brash logic when he once worked out on his slide rule that it’s better to rent your home than buy it. He, of course, did the opposite.
ian – I see what you’re trying to say, but I don’t see the direct equivalence between these two things.
With the ECan situation what has happened is that, in effect, the board has been changed. The source of the funding (i.e. the taxpayer) and those providing the services (i.e. ECan staff) remains the same.
Trevor implying that a Labour government would break a contract legally entered into without full compensation for losses is more like the Administrator put in to run ECan breaking contracts entered into by council without compensating the companies who suffer as a result. I’d certainly be strongly against that.
I’d be happy with Labour going into an election stating unequivocally that they’d not enter into any more PPPs in some or all of the areas where National has started them, and letting everyone know that existing contracts would not be renewed when they came to an end, or cancelled in line with the contract if that were provided for. But refusing to acknowledge contract rights properly entered into is a very dodgy thing for a government to do. It’s the same as if National had refused to pay for NZRail when they came to power.
This article touches on some points with respect to PPP’s that need further discussion.
- Government can borrow at cheeper rates and on better terms than private organisations.
- Government does not have to operate at a profit.
- Public services can odopt the best efficient practices from private enterprise.
So where do the benefits in PPP’s lie?
@jennifer
What I’m saying is that if you have a proeprty you can’t touch but have to pay out to keep in nick you’ll want change
Oliver, that’s the beauty of my ‘no compensation’ idea. The taxpayer actually wins, for once.
@jennifer
except you’ll permanently enrage those groups and create a negative reaction for the govt – it would complete destroy the reputation for Govt business relations
@ stephensmikm, not so. Any business venutre is a risk. Assessing the risk is part and parcel of the venture. Best to know the risks up front, then they can make their best business decisions. Under my plan, one risk would be losing the lot if the government changes. Easy, really.
@ Jennifer
Not if a contract is involved
as I stated it would damage Govt relations with any business opportunitie like renting office blocks for Govt Departments – if there is no gurantee beyound 3 yrs then contracts can become utterly meaningless – it would be a genuine sliding scale case where eventually NZ wouldn’t be able to do deals with other countrys out of lack of trust
@ Jennifer
Not if a contract is involved
as I stated it would damage Govt relations with any business opportunitie like renting office blocks for Govt Departments – if there is no gurantee beyound 3 yrs then contracts can become utterly meaningless – it would be a genuine sliding scale case where eventually NZ wouldn’t be able to do deals with other countries out of lack of trust
@ stephensmikm, nice try at scaremongering, but this is about state schools built under a tory PPP agreement. Easy to ring fence that little scam. How can they moan when they know up front? Just ‘do a Gerry’ and bang it through under urgency, a bit like the super city no-one wants that will steal $28 billion of the people’s assets and hand them over to a bunch of hand picked business mates to sell off top another bunch of business mates. Oh, and remove the legal protections that would stop a sale, too. But that’s all okay, right, because it’s tories in charge?
I’m travelling – so not able to follow this closely. The point of making a clear policy statement is so that those thinking of being involved know what will happen. Disagree with the no compensation line. But it should be limited to value of buildings not all the extras involved.
@ jennfier
No it would be detrimental to any future govt actually…
it’s ot scaremongering , it’s fact
it’s all a bad idea to bring into convo other issues like super city- don’t suggest what people want and don’t want…
If they know up front but the Govt is still attempting the deal at a price with the semi- assurance the govt will still be around then you’ve got he problem of if the govt does not get in or a snap election or a govt failure and no contract to fall back onn – that’s why we have contracts to allow equal bargin
@ Trevor Mallard
cheers for the input – I find this other approach a little extreme..
@ Trevor Mallard
cheers for the input – I find this other approach a little extreme..
Okay, so we’re agreed then? Take the tory PPP state schools back under the government’s wing, and pay them for the buildings. Done and dusted. Like Trevor says, they can’t say they weren’t told. Nice and clean. Good work, Trev.
I’d personally find that too minimal iof I was the business proposer as a deal but if it was agreed in contract then I’d accept it
The overarching contract is between the people and their elected representatives. If a policy goes up, and is endorsed by the public in an election, it kinda overrides a tawdry little scam deal cooked up by tories and their mates after the election. Check their manifesto. I can’t see any privatisation of public schools in there.
this is not privatisation this is replacement of the schools closed under labour that the govt is trying to make as cost effective as possible, if National , green or Labour’s elite wealthy wanted to invest there would be no problem I’d say, the Maori trusts would probably invest as well in an idea like this
I suppose the question now is whether The Hon.Mr Mallard MP will be having this put into the 2011 election Manifesto of the Labour party I guess – there is a difference between ‘developing’ and having a clear initiative to put in place when ever Labour goes back into govt
If Phil Goff is any type of leader, he will be dishing out one serious arse kicking to Trevor Mallard.
These sort of statements really give the impression that Labour is rudderless.
No Brett. Labour is not udderless. From its loins flows the milk of human kindness, and a deep concern for the dairy farming industry in Canterbury. Oops. Scratch the last bit. That was John Key promising the dairy farmers all the water they want. Sorry.