Chaos fears over private deals to build our hospitals
SCHOOLS, hospitals and other public services face serious disruption if ministers do not prepare for £10billion of controversial PFI schemes coming to an end, MPs warned last night.
Taxpayers could also be landed with a huge bill as 200 contracts expire and ownership passes from private hands to the public over the next decade.
Private finance initiatives – embraced by John Major and Tony Blair – saw the state hire private firms to build new schools, hospitals and prisons, in return for huge annual fees over periods of up to 30 years.
But many ended up costing taxpayers up to five times the original cost, amid claims some hospitals were charged £333 by a PFI provider to change a lightbulb.
A report today warns of further costs and disruption, saying if the Government is not careful millions could be wasted on paying expensive consultants to sort out the hugely complex deals.
The Commons public accounts committee says the watchdog overseeing the contracts – the Infrastructure and Projects
‘Taxpayer could end up with a huge bill’
Authority – does not have all the information it needs, with some contracts held on obsolete technology such as CD-ROMs.
Public bodies like councils and NHS trusts also lack the staff and expertise to handle the deals, while some unscrupulous PFI investors could try to maximise profits by running down maintenance of the buildings before the deals end.
Committee chairman Meg Hillier said: ‘We are about to see a wave of PFI contracts come to an end.’ She said they need challenging carefully and in advance to ‘ensure that the asset is handed to its public sector owner in good order’.
‘The taxpayer could end up with a huge bill if PFI companies are not held to account. Public bodies and the Treasury need to be on top of this issue now.’
Union leaders called on the Government to take heed. The GMB’s Rehana Azam said: ‘ PFI was a disastrous policy that saddled taxpayers with extortionate charges. As historic PFI contracts finally end, ministers must intervene to prevent a bonanza for private equity profiteers and fat-cat consultants.’