Private profit, public squalor

Why, in 2002, does a school have rain pouring through its rotting window frames? Francis Beckett rep

Soheila Mathison is the 13th head teacher that Mitchell Brook Primary School in north London has had in the past six years. But she's there for the long haul - she's served 18 months already, which is a record. The problem with the job is not that 42 per cent of the pupils are refugees, that 26 languages are spoken, that the locality has the highest incidence of gun crime in Europe, and that there have been two shootings and a fatal stabbing outside the school gates in the past three months. Nor is it that nearly two-thirds of the pupils qualify for free school meals. These are challenges Mathison is happy to rise to. Already she has improved the children's test scores, and when you walk round the school with her, several children spontaneously rush up and cuddle her.

What makes the job so dispiriting is that the building is crumbling. Rain pours through the rotting window frames, despite the paper that staff have stuffed into the gaps. In winter, the boiler frequently wheezes to a standstill. The tiny playground is pitted with holes, causing frequent injuries. The library is like a prison cell, and its few books old and tattered. The nursery teacher buys her equipment from car boot sales. The teachers have brightened up the place with some leftover cans of lime-green paint, donated by a local church, but in many places the damp mocks their efforts.

The reason for all this can be summed up in three words: Private Finance Initiative. The government's determination to make sure that big companies take charge of school spending has prevented Brent Council from allowing Mitchell Brook so much as a lick of paint for six years.

In 1997, several Brent schools signed up for what has been aptly called the Public Fraud Initiative. The idea was that a construction company would finance the building work, and the school would pay it back over 25 years. What this means is that, for a quarter of a century, the company decides on what the priority is for any spare money a school has. If a school wants to paint the library, it won't be the school's decision.

But there was no other way for Brent schools to get any money spent on their buildings, which had been neglected for years. The government was determined to push them down the PFI route; if they agreed, they were allowed to go into debt to contractors to the tune of £29m.

A group of heads, governors and council officials spent hours in meetings with contractors over the next four years, reducing them to a shortlist of two - Jarvis and Accord. Nearly £1m was spent on surveys, reports, feasibility studies and other PFI paraphernalia. But as the two construction giants negotiated, so the price went up. At the end of last year, the group was told that the price had gone way over the £29m limit. It was also well above the "public-sector comparator" - the estimate of what the job would cost if done by the public sector. After four years, the PFI had reached a dead end and not one paintbrush had got wet.

The contractors, however, helpfully made clear what the trouble was. Doing up existing buildings was a dodgy commercial proposition: contractors might run into unexpected problems. They would prefer to build a new school, making it easier to control costs and rake in profits.

So the government, always sensitive to the preferences of private-sector contractors, agreed that if there were a PFI scheme to rebuild a small number of schools, Brent schools could go into debt. As the council put it in a letter to schools, there would be "complete replacement of schools and no refurbishment". But only those with substantial spare land can be rebuilt (otherwise, there's nowhere to put the pupils while rebuilding goes on) and this cut the numbers that could benefit from 30 to six. Mitchell Brook, with its cramped site, is not one of them. Worse, it had an outstanding £72,000 debt to the council - incurred by one of Mathison's predecessors - for a new roof. The school has so far never had the money to pay back the loan. Now Mathison has been told that it must repay this over the next five years from its "capitation" income - the amount it gets per pupil to meet running costs.

The one bit of good news seemed almost to mock Mitchell Brook's troubles. The schools that chose to go into the PFI rebuilding scheme will not now get any money for routine repairs. That money is therefore available to other schools, and Mitchell Brook will get £32,000. Alas, that must go towards paying off the debt.

Mathison wrote to the local MP, Paul Boateng, begging him to ask the council to let her off the debt. She told him that in order to give swimming lessons, she had bought some children costumes with her own money, and that staff subsidised a breakfast club because most children came to school hungry. She warned that without support, the school "will become a ghetto . . . as everyone will be tired of fighting and will move away".

Boateng sent the letter to the Education Secretary, Estelle Morris, who replied that the school was not attracting enough pupils: "A 4 per cent fall in pupil numbers - which is what Mitchell Brook has experienced this year - is bound to have an impact [on resources]." No doubt it is one of those that Morris wouldn't touch with her infamous bargepole.

The truth is that the children - some of the unhappiest and most deprived in the UK - and parents value the school and its committed, charismatic head. A teacher once told the children to write what they wanted most. Some of the results were pinned to the wall, and one reads: "I wish my mother would love me." The children might also wish that ministers would love them, instead of those wretched PFIs.