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Atkins' contract with Southwark LBC has collapsed just two years into a five-year deal to try to sort out the borou...
Atkins' contract with Southwark LBC has collapsed just two years into a five-year deal to try to sort out the borough's failing education service - raising serious questions about the government's public/private partnerships experiment.

Each party blames the other for the collapse of the deal, with Atkins saying there has been resentment at the council since the Department for Education & Skills said the council was incapable of running its own education service, forcing it to accept the help of a private sector partner. But Southwark is hardly likely to have sabotaged its own contract.

The DfES intervened after an Ofsted inspection in April 2001, resulting in the council handing control of its education service to Atkins.

But the arrangement between Atkins and Southwark foundered because the government changed the way funding is allocated to education departments and schools in a way the company claimed was unacceptable. Government guidelines said Atkins ought to negotiate a contract with each school individually, so Atkins walked away. The council, of course, does not have that luxury.

Each of the three parties involved - the government, Atkins and Southwark - blames the other for the collapse. Atkins says Southwark's new rules were a change in the conditions under which the contract was originally signed and were unworkable; the council says they are the government's guidelines which have to be followed. The government says they are only guidelines - but as everyone knows, government guidelines are difficult for councils to ignore.

What it amounts to is that the government pushed Southwark into this deal, then made it unworkable.

It is unclear how councils are supposed to cope with the inevitable cost and upheaval when a private firm walks away from a huge deal in the middle of a contract. Inevitably it will be the children and staff involved who will lose out in the ensuing chaos.

The government insists schools should be made to feel empowered and in control of their own fu tures and devolving funding is clearly the right way forward. But to cut councils out of the loop on the one hand, while insisting PPPs are the future on the other, is clearly an unworkable strategy. The DfES has wrecked the contract it insisted on and seriously damaged Southwark's efforts to turn round its education service.

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