Wednesday, 26 January 2011


This was not a headline I would have expected to be in the Daily telegraph:

PFI: £70m bill for schools that had to close

The Daily Telegraph has rather belatedly discovered that PFI (in England) costs a fortune and brings little medium of long term benefits to users who continue to pay through the nose for maintenance. What seems to have wound up the Daily Telegraph is the fact that at the very least three PFI schools which have been closed due to falling pupil numbers are still being paid for by education authorities (in England) who continue to pay the contractors millions of pounds each year for them until 2035. Additionally, and this must come as something of a shock to the Daily Telegraph, that dozens of other PFI schools which have been built and operated by the private sector, which rented back to the taxpayer regularly face high costs and “incredibly frustrating” restrictions which “hamstring” how they are able to use their school buildings.

Oddly enough the House of Commons’ Committee on Public Accounts which has backed Plaid Cymru’s stance on Private Finance Initiatives (PFI) on housing and hospitals. PFI was developed by the last New Labour government which involves private companies developing projects and paid back by the government over a long contract. Plaid has consistently criticised PFI projects for being costly to the taxpayer and poor in delivery. Right from the start Plaid said that Private Finance Initiatives were a New Labour trick which would eventually cost the taxpayer much more than if they were government-funded upfront. The Public Accounts Committee report has slammed PFI housing projects which have cost considerably more than originally planned and have been, on average, two and a half years late, and says that poor administration, rising costs and the well-known cunning of the financial services sector mean that taxpayers have not benefited from using this method of funding.

It's worth noting that the Plaid-driven One Wales Government confirmed back in 2007 that it would end PFI in the Welsh NHS as part of our goals of keeping the markets out of the health service. Previous reports have shown that PFI has failed when used in the defence sector and this Public Accounts Committee report says that there have been serious problems using it for building housing and hospitals in the NHS. Yet, despite this the UK Government persists in continuing blindly down this road, it's time to draw a line, its time to reconsider the best and most appropriate ways of funding new projects, especially as the Westminster Government is hell-bent on slashing the capital spending which was their core funding.

Further Telegraph revelations have revealed that existing PFI agreements, taxpayers are having to pay more than £200 billion for schools, hospitals and other projects whose capital value was little more than £50 billion. The is the price we are all having to pay (and pay again) for Blair and Brown's premierships – one questions I would like answered is where exactly was the Daily Telegraph when the rush to PFI was under-way? perhaps now that the Daily Telegraph has woken up to the expensive mess that excessive use of PFI has created then perhaps the Conservative part of the Con Dem Government will stop using PFI - perhaps not as it is rather popular with their friends in the City?

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