MP, Labour’s Shadow Chief
Secretary to the Treasury, commenting on the NAO’s report out
today on the costs and benefits of the Public Finance Initiative
(PFI), said:
“The National Audit Office confirms that, not only is there
little evidence of the benefits of private finance procurement,
but also that it “results in additional costs compared
with publicly financed procurement”.
“According to the NAO’s analysis of a schools building project,
costs under the Tories’ new PF2 schemes are 40% higher than
through direct government funding.
“Worryingly, despite this and the Office for Budget
Responsibility’s description of PFI as a “fiscal illusion”, it
seems that the Treasury has actively decided against removing
budgetary incentives which exist in favour of PFI.
“Today’s report only further demonstrates this Tory
government's continued commitment to fleecing tax payers for
the benefit of large PFI firms. It also raises more questions
over the use of PFI in a week in which the Carillion scandal has
left many fearing for their jobs and standard of their public
services.
“The next Labour government will draw a line under the failed PFI
approach to public investment, and will replace it by a
transparent and accountable approach, which will reduce the costs
and deliver significant savings to the taxpayer.”
Ends
Notes to editors:
- Labour is committed to ending PFI and bringing existing
contracts in-house by nationalising SPVs. This is significantly
cheaper than buying out contracts as only equity needs to be
compensated.
- Profits are frequently moved offshore, enabling massive tax
avoidance. The Public Accounts Committee wrote in 2011: “We have
seen information which strongly suggests that investors are
making excessive profits from selling on shares in PFI
projects.”. Independent research on the scale of
this: https://www.european-services-strategy.org.uk/news/2017/new-evidence-of-the-scale-of-uk-pfippp-equity-offshoring-and-tax-avoidance
-
28% of PFI
contracts by capital value have been to subject to buyout,
termination or major problems
