Government urged to prove the value of PFI contracts
PFI CONTRACTS are “not working for the taxpayer” and the Government should release evidence to back up its continued claims that they provide value for money, a damning new report has said.
The Treasury has “no plans to assess the value for money” of the private finance initiative to the public purse, despite 25 years of programmes that have poured tens of billions of pounds into private firms, the Public Accounts Committee said.
In a report released on Wednesday, MPs said Chancellor Philip Hammond’s department had made a “disappointing” lack of progress in analysing the value of PFI deals since it raised concerns in 2011.
It called for the Treasury to release this data by April next year and compare the cost with similar public-sector contracts. A National Audit Office (NAO) report in January revealed that taxpayers face paying almost £200 billion for PFI contracts between now and 2040, even if no further deals are made.
PAC chairwoman Meg Hillier said: “Much has changed in the past quarter-century, but Government’s inability to answer basic questions about PFI remains undimmed.
“It beggars belief that such apparently institutionalised fuzzy thinking over such large sums of public money should have prevailed for so long.
“The Treasury simply cannot support its assertion that PFI represents good value for money. Yet while Government is now seeking to collate the PFI data that does exist, it does not intend to publish the results of this work.
“This is unacceptable. Government must level with taxpayers about the value of PFI.”
PFI was introduced by the Major Government in 1993, but underwent large expansion when Tony Blair’s Labour government swept to power in 1997.
It allows large infrastructure projects to be kept off the public balance sheet.
There are currently more than 700 ongoing PFI contracts, which have been used to build £60bn of “assets”, the PAC report found.
The contracts saw public bodies pay a total of £10.3bn to private firms in 2016-2017.
No new PFI deals have been signed in the past two years, down from a peak of about 60 10 years ago, the report found.
A reformed set-up, PF2, has been used only six times since it was initiated in 2012, it added.
The inability to answer questions about PFI remains undimmed. Public Accounts Committee chairwoman Meg Hillier.