Public Finance Contracts

Education and Skills written question – answered on 19th December 2006.

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Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

To ask the Secretary of State for Education and Skills what (a) public-private partnerships and (b) private finance initiative contracts have been entered into by his Department; what assets were transferred to the private sector as part of each deal; what the value of these assets was; what the total cost is of each contract; and what estimate was made of the cost to his Department of traditional procurement over the life of each contract.

Photo of Jim Knight Jim Knight Minister of State (Schools and 14-19 Learners), Department for Education and Skills, Minister of State (Education and Skills) (Schools and 14-19 Learners)

The information is as follows:

(a) The Department has only entered into one public-private partnership (PPP) agreement, in July 2001, which was with Capita Business Services Ltd. for management and delivery of the Connexions Card. The PPP Agreement budget was £108.8 million (originally £109.7 million) for the period September 2001 to December 2008. However, the Department announced on 9 June 2006 that the Connexions Card scheme was to close early. The PPP Agreement was terminated on 5 August 2006.

Ownership of Departmental assets was not transferred to Capita. The public sector comparator calculation made at the time showed that the cost of the Connexions Card PPP was likely to be in the mid range of estimated costs of a comparable traditional procurement. But this was not the key factor in deciding to use a PPP; more important was the ability of a partner organisation to manage, develop and implement complex smart card technology and also have commercial expertise to negotiate rewards and discounts associated with the Connexions Card.

(b) The Department itself has not entered into any private finance initiative contracts.

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