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PFI projects could continue to drain the public purse long after contracts end, MPs warn

PUBLIC-SECTOR projects built and run by privateers under the notorious private finance initiative (PFI) could continue to drain the public purse long after the contracts end, MPs warned today.

A damning report by the public accounts committee (PAC) said that services including schools and hospitals face “serious disruptions” if ministers fail to prepare for the expiry of hundreds of PFI contracts covering £60 billion of public assets.

About 200 PFI contracts are set expire over the next 10 years, and the PAC warned that mismanagement of the process could result in large sums of taxpayers’ money being wasted.

Lack of attention by public-sector bodies could leave them facing huge bills for work that PFI companies have already been paid to do, it said, adding: “What is certain is that action needs to be taken now to avoid this becoming a huge payday for consultants.”

PAC chairwoman and Labour MP Meg Hillier said: “We are about to see a wave of PFI contracts come to an end. These require careful and advance challenge to ensure that the asset is handed to its public-sector owner in good order.”

Warning that “crunch time” was approaching, Ms Hillier said: “The taxpayer could end up with a huge bill if PFI companies are not challenged and held to account.”

GMB union national officer Rehana Azam said: “PFI was a disastrous policy that saddled taxpayers with extortionate charges while low-paid workers were outsourced on inferior terms and conditions.

“As historic PFI contracts finally end, ministers must intervene to prevent a bonanza for private equity profiteers and fat-cat consultants.

“All services that were outsourced under PFI must be returned in-house to the public sector where they belong.”

Unite assistant general secretary Gail Cartmail said: “Over decades PFIs have provided a vehicle for spivs and speculators to thoroughly and unscrupulously rinse the taxpayer of cash.

“These same companies cannot now be allowed to get away with letting infrastructure and services go to rack and ruin, safe in the knowledge that the state will pick up the bill when the contract ends.”

A Treasury spokesman waved aside the committee’s warning, insisting: “There will be no disruption to public services, such as hospitals and schools, as a result of PFI contracts ending.”

Government departments had spent several years preparing for the smooth transfer of ownership, he said.

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