Mcdonnell pledges an end to PFI and recommits to wave of nationalisations

Labour will end the use of PFI (Private Finance Initiative) to fund public infrastructure and bring billions of pounds worth of private contracts into the public sector, John Mcdonnell has said.

The shadow chancellor promised a Labour government would sign no new PFI deals, which have seen local authorities and health trusts tied to costly and inflexible decades-long contracts, and that existing schemes “will be brought in-house”.

“The scandal of the Private Finance Initiative, launched by John Major, has resulted in huge, long-term costs for tax payers, whilst handing out enormous profits for some companies,” Mr Mcdonnell told Labour conference delegates in Brighton.

“Profits which are coming 0 John Mcdonnell was speaking in Brighton out of the budgets of our public services.

“Over the next few decades, nearly two hundred billion is scheduled to be paid out of public sector budgets in PFI deals.

“In the NHS alone, £831m in pre-tax profits have been made over the past six years.”

Spending on public infrastructure is devolved, with the Scottish Government claiming its Non-profit Distributing (NPD) model has put an end to excessive earnings by private companies.

However, Scottish Labour have called for a review of all PFI and NPD contracts still operating in Scotland, and say the SNP’S reforms are merely a “rebrand”.

The party’s Holyrood economy spokeswoman Jackie Baillie said: “This increases the pressure on the SNP government to come clean about the costs of their own private finance model, NPD. Scottish Labour committed to a review of projects delivered by all private finance models used since devolution. The SNP should back that review – including decisions they have made in the past ten years.”

The shadow chancellor also recommitted to Labour’s programme of renationalisation, telling Labour delegates: “Rail, water, energy, Royal Mail – we’re taking them back.”