Labour’s insistence on sticking to its ideological guns is going to cost it tens of millions as it takes over the construction of new schools which were to have been public, private partnerships.
And the former Health Minister is claiming the Government’s refusal to use a public, private partnership to rebuild Dunedin Hospital will add another $1.4 billion to the capital budget.
Education Minister Chris Hipkins confirmed yesterday that only partnerships which had been signed and were underway would be continued by the new Government.
“The parties that make up the current Government have all been clear that we don’t support public-private partnerships (PPPs) for the provision of basic core public services like schools and hospitals,” he told Parliament.
That leaves the future of a list of new schools announced by National during the election campaign up in the air.
Hipkins was asked by former Education Minister Nikki Kaye whether the rebuild of Whangarei Boys High School which was announced as a PPP during the election campaign would go ahead.
He replied: “That would depend on whether or not they are part of a currently signed PPP. They are not on the list of signed PPPs entered into by the previous Government, so that is something that we will be considering.
“I can give them a reassurance that their building projects will go ahead. “
Former Prime Minister Bill English and Kaye announced the rebuild three weeks out from the election and English estimated it would cost $50 million.
He said a PPP allowed the Government to get more done sooner, and freed the school up to focus on the achievement of the students.
The same argument was used for the rebuild of Dunedin Hospital.
The former Health Minister Jonathan Coleman said that by not doing it as a PPP, it would $1.4 billion to the capital budget.
He said that way an extra $1.4 billion could be freed up for more specialist appointments, for more operations.”
But Health Minister David Clark claimed that overseas experience was that those who had entered into public-private partnerships had ended up paying many times over for the experience and that the healthcare delivery had been poor.
“I’m absolutely delighted that we were able to scrap the public-private partnership model for Dunedin Hospital, because it made no sense.” he said.
Though the Dunedin Hospital is the biggest single bill — the education sector faces an on going need for capital expenditure, particularly as Auckland grows.
This is alluded to in the Ministry of Education’s briefing to its Minister where it lists Cabinet papers currently being worked on.
One is titled ‘” Auckland Education Growth Plan.”
The briefing says: “This paper will provide the business case for the next ten years and outline the vision and objectives for Auckland over the next 30 years.”
Former Minister Kaye says the last Government was looking at a range of schools for Auckland.
“It is not clear at the moment what is happening with those schools,” she told POLITIK.
“The Minister has said that existing PPPs stay.
“I’m not clear whether any other contracts that were signed included the schools that we mentioned in September.”
That list was unveiled by Associate Education Minister Tim MacIndoe and he made it clear the-then Government was considering.PPPs not just for Whangarei but other schools as well.
“The redevelopment (of Whangarei Boys High School) will likely be delivered as a Public Private Partnership (PPP), alongside Scott Point Primary (Auckland), the co-location of Marlborough Boys’ and Marlborough Girls’ Colleges and Pukekohe Belmont Primary,” he said.
“PPPs can provide significant cost savings and efficiency gains, and these projects could benefit from such a model, should we choose to proceed this way.”
Finance Minister Grant Robertson told parliament on November 29 that he had been advised of “significant capital spending pressures across multiple portfolios, including defence, education, and health.”
Though Robertson claims (rightly) that the previous Government left out a lot of capital spending from the Pre Election Fiscal Update, Labour is making the challenge of trying to find the money greater for itself because it rules out public- private partnerships.