Tim Byles, chief executive of Partnerships for Schools (PfS) has resigned. He will be head of a social enterprise called Cornerstone which will donate its surplus to charity. Cornerstone is backed by John McDonough of Carillion and Rod Aldridge, founder of Capita, who also runs academy sponsor the Aldridge Foundation. Mr Gove is said to welcome this new enterprise possibly because Mr Byles hopes that the scheme will help provide free schools.
But exactly what is a “social investment company”? Its prime concern is to make a “commercial return for investors. It is, in fact, the same as any profit-making company and in giving to charity it will be doing no more than many companies do already. So it would appear that the donation of “surplus to charity” is no more than PR spin.
There are two further worrying aspects
Cornerstone wants to buy “surplus” assets from the public sector, refurbish them and sell them back. The company’s profit, therefore, will come from the taxpayer in the form of the difference between the cost of purchase and its sale price. If a surplus public-owned asset needs refurbishment then would it not be cheaper to put the work out to tender? And if Cornerstone becomes the preferred vehicle for the provision of new schools, then is this unfair competition?
is quoted as saying his social enterprise scheme is a “new form of PFI”. The Private Finance Initiative (PFI) has been a financial disaster leaving the country with debts which will take years to pay off. Is the Government really considering a similar initiative?
The second concern is that Mr Byles has not left PfS yet the new venture is very close to trading. The guidelines rule that a civil servant can take up a position with a commercial interest only after a certain period of time - usually three months. The question is: will Mr Byles be able to separate his public service responsibilities at PfS from his new role as a head of a commercial enterprise? Is there not a conflict of interest?