PPPs can deliver substantial innovation to education infrastructure and service delivery. While arrangements differ, the private sector typically finances, designs, constructs, and operates a public school facility under a contract with the government for a given time period, for example, 20 to 30 years. At the end of that concession period, ownership of the school facility transfers to the government. Under typical education PPPs, the private sector invests in the school infrastructure and provides related noncore services (school transport, food services, cleaning, and so on), under contract while the government continues to provide core services, namely, teaching.50
The United Kingdom is home to the world's largest and most sophisticated PPP schools program. Most new schools and tertiary education institutions are built under the PFI or some of its variants. All in all, nearly 100 education PFI deals valued at £3.5 billion have been signed. The next frontier: using PPPs to refurbish and modernize every school in the country. Over the next 10-15 years, every school in Britain will be brought up to 21st century standards through a program called Building Schools for the Future. A $37 billion investment in new buildings and refurbishment will be delivered through a combination of joint venture models and more traditional design-and-build contracts, information technology and communication contracts, and facilities management contracts.51
Meanwhile, a very successful first round of PPP school projects in New South Wales, Australia, prompted state government officials to pledge to use PPPs for all future school buildings in the province. A recent report by Standard & Poor's showed increasing investor interest in education PPPs in Australia, with projects valued at $3.7 billion in the pipeline.52
A cautionary tale lies in the Nova Scotia, Canada, experience where PPPs were used to build 39 schools in the late 1990s. Originally, the government had planned to build 55 schools, but the number was scaled back when the initiative was beset by a variety of political and other problems, including cost overruns driven by project "gold plating" (that is, increasing school standards, expensive site selection), weak government management, and problems with the contract terms.53 Today privately operated schools represent approximately 14 percent of the square footage in the province's schools.