PPPs and Lease-back Schools
Across Canada, governments and public employers are contracting with private companies to build and operate a wide range of public services and facilities. Examples include lease-back schools, toll highways, privatized water and sewer system, even privatized prisons and welfare systems!
Referred to as “Public-Private Partnerships” (PPPs), these schemes are sold to the public as win-win situations. But our experience has shown that while corporations prosper, the public and the workers lose out.
PPPs are simply the latest name being used to disguise the handing over of publicly-delivered services to the private sector. In education, PPPs have taken the form of lease-back schools.
What Are Lease-back Schools?
In the simplest terms, a lease-back is an arrangement in which private companies build schools and then lease them back to the school boards. Private companies have always designed and built schools but what is unique about PPP schools is that the private sector now essentially owns and, in many cases, operates the schools as well. At the end of the lease term, the board can extend the lease or buy back the school from the company.
What’s In It for Them?
The government claims that everyone stands to gain from PPP schools. What is very clear is that the private sector will benefit and, in the short term, the government can score some political points.
- Governments claim that there is no money for new schools and that it is good that the private sector is “willing to help out.” In fact, PPP schools will cost the government more.
- Governments can hide debt from the public as only the lease payment shows up on the books. By hiding the debt, governments can offer tax cuts to voters at the expense of public services like education and health care.
- Private companies are motivated by profit, and there is plenty to be made in PPP schools.
- Private companies also have other interests. Developers profit directly when a new subdivision includes a school. It helps sell houses, and at a higher price.
- Private companies make money from contracted out services like cleaning and maintenance.
Why Lease-back Schools Are Bad News
Although the bulk of lease-back schools have been built in Nova Scotia, PPP schools can also be found in B.C., New Brunswick and in Ontario.
These are the kinds of problems we have seen so far:
- Lease-backs cost more money. The N.B. Auditor General has concluded that a Moncton PPP school cost $900,000 more than if the project had been public.
- Buying a house or property is cheaper than renting, the same is true of schools.
- There are hidden costs to the public such as the revenue lost as a result of the huge tax break the private companies receive as part of most lease arrangements.
- Schools are operated for profit rather than for the needs of the community.
- Boards have little or no control over school construction and upkeep.
- PPP schools are not owned by the public so community groups pay user fees for after hour activities.
- Decisions about where to build schools are based on the potential to generate profit.
- In Nova Scotia, Boards closed community schools to pave the way for regional mega-schools, built and owned by for-profit corporations.
- Privately-owned and operated schools mean fewer good jobs in the community.
- The terms of lease arrangements can last as long as 35 years, tying students, workers, and parents to the fortunes of corporate owners for decades.
Why We Need to Act Now
CUPE members have successfully stopped PPP school projects in B.C. and P.E.I. In Ontario, some school boards have studied lease-back schools and rejected the idea.
It is time for the government and schools boards to recognize that PPP schools are bad news for education.
For More Information:
- Public Interests vs. Private Profits, The Threat of Lease-Back Schools
- Behind the Pretty Packaging, Exposing Public Private Partnerships
- CUPE web site – www.cupe.ca – Fighting Privatization