UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Saturday, 20 August 2011

Treasury Select Committee slates PFI

Private Finance Initiative (PFI) funding for new infrastructure, such as schools and hospitals, does not provide taxpayers with good value for money and stricter criteria should be introduced to govern its use, the Treasury Select Committee has concluded in a new report. http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news/pfi-report/

Chairman of the Treasury Select Committee, Andrew Tyrie MP, said: "PFI means getting something now and paying later. Any Whitehall department could be excused for becoming addicted to that. We can't carry on as we are, expecting the next generation of taxpayers to pick up the tab."

"PFI should only be used where we can show clear benefits for the taxpayer. We must first acknowledge we've got a problem. This will be tough in the short term but it should benefit the economy and public finances in the longer term."

"PFI should be brought on balance sheet. The Treasury should remove any perverse incentives unrelated to value for money by ensuring that PFI is not used to circumvent departmental budget limits. It should also ask the OBR to include PFI liabilities in future assessments of the fiscal rules."

"We must also impose much more robust criteria on projects that can be eligible for PFI by ensuring that as much as possible of the risk associated with PFI projects is transferred to the private sector and is seen to have been transferred."

UNISON has welcomed the Treasury Select Committee report: http://www.unison.org.uk/asppresspack/pressrelease_view.asp?id=2410

Dave Prentis said: “The Committee have confirmed what we know is true - PFI is a waste of cash. Government incentives and short-term gain are being put before the long-term pain.

“PFI is a huge burden on the public sector and has cost taxpayers billions over the odds. The huge PFI debts hospitals have run up have played a major part in the cuts being made to staff and treatments.

“Despite criticising PFI in opposition, the Tories pushed for it in power, signing off many new projects. Money that should be re-invested in providing better services goes straight into the profits of greedy business. The Government must listen to the facts and finally ditch PFI.”