Con Dem Cancellor George Osborne is hoping to shave hundreds of millions of pounds off the cost of thousands of controversial private finance initiative deals in an attempt to cut Government spending still further.
He has targeted potential savings from the almost £300bn paid out by schools, hospitals and government departments over the past two decades for buildings and services under "expensive and inflexible" deals with contractors, The Independent on Sunday has revealed. http://www.independent.co.uk/news/uk/politics/osborne-looks-to-save-hundreds-of-millions-on-pfis-2164393.html
A Whitehall source said last night: "The PFI system presents some of the greatest opportunities for savings, but we have to be careful to do it with the agreement of the contractors because we cannot breach existing contracts."
The Chief Secretary to the Treasury, Danny Alexander, has warned that PFI deals are "not immune" from the cuts process. He added: "Officials have met with the major equity holders and other key industry players, including those responsible for schools and hospitals... to discuss options for savings." Local councils will be given guidance about where they can find savings in their own PFI deals.
The move follows the slashing of at least £500m from charges made by government contractors, to help cut the national deficit. The price for this reduction was the termination of the two-tier workforce agreements.
Union members and workers working on PFI projects can expect to be forced to struggle to maintain their pay and conditions which in some cases are still below those in the NHS and Local Government.
