02/10/2008

Shot in the foot

Shot in the foot Private Eye 3 Oct
The allure of off balance finance has produced no more bizarre policy that the scheme to privatise defence training. Because the plan to to transform defence training involved raising around £1bn pounds for buildings (a fraction of the total £12bn value), it had to be done through PFI which means the training itself will be provided by private companies.

As defence secretary Des Browne explained last year "the most significant advantage was that [PFI] allowed us the opportunity to make capital investment that, I candidly admit, we could not otherwise make."

The only reason PFI was needed was to keep the debt of the books so as not to breach the governments own self-imposed and arbitrary borrowing limit of 40% of gross product, which is now set to be scrapped anyway.

The result is the prospect of military training being handed to some very questionable operators. One member of the Metrix consortium lined up for the project is private education company Nord Anglia, no stranger to criticism. Now, reports the Times Educational Supplement, a company it jointly owns with Amey is being investigated by Scotland Yard's fraud squad over £240,000 in missing grants intended for vulnerable youths.

However I read that the $360 million takeover of education firm Nord Anglia is supported by a debt package raised partly in Asia. Baring Private Equity Asia has completed the takeover of Nord Anglia Education, which runs schools and provides learning services predominantly in Asia, for an equity value of £190 million ($360 million).

Metrix Shambles and credit crunch

A reminder what Metrix say on their web site!!

"Within the consortium we bring the benefits of very large scale commercial infrastructure programmes to the MOD for the first time, and the proven confidence of the financial markets. Reliability and robustness are the core attributes of the supply chain.

Are they still sure about that?


High quality, proven names including Nord Anglia Education (Army Foundation College Harrogate), EDS (DII, JPA and TAFMIS), and the Open University will play major roles in the delivery of the partnered services."
http://www.qinetiq.com/home_metrix_review/about_metrix.html

The Shropshire Star article here.The questions posed by Mark Pritchard appear below along with the responses.

Nord Anglia
Mark Pritchard: To ask the Secretary of State for Defence what assessment he has made of the effect on the Metrix Consortium and the Defence Training Review programme of the sale of Nord Anglia to Baring, an Asian private equity company. [217720]
Mr. Bob Ainsworth: The MOD will need to be content with all relevant arrangements pertaining to the Metrix Consortium and its subcontractors as a precursor to entering into a contract for DTR Package 1. The DTR contract is not yet let but Nord Anglia are envisaged as a lower-tier sub-contractor to Metrix. MOD will therefore be assuring itself that this change in ownership does not in any way preclude the inclusion of Nord Anglia under the terms of the proposed DTR contract, which includes specific provisions to protect the national interest. If these subcontracting conditions cannot be met, the requirements of the contract to provide the DTR services nonetheless persist and it will be for Metrix, as the prime contractor, to deliver against those requirements.

Are you all clear on this now?

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