From across the political spectrum, PFi is once again emerging on the agenda. Last week, George Monbiot’s article in the Guardian argued for “odious” PFi debts to be abandoned outright. The Conservative MP, Jesse Norman, this week launches his PFi Rebate campaign, a proposal to raise £500 million by reducing PFi repayments by 0.05%. Savings of this size would certainly be useful, but considering the size of the liabilities in question the figure lacks ambition. To resize our PFi obligations into anything remotely “fair”, savings must be in the billions.
As we reported last month, the British public is committed to repaying over £260bn for buildings valued at under £60bn. To make public projects attractive to private investors, many have been tailored to deliver unnecessarily large returns guaranteed by the taxpayer. One PFi project saw returns of over 600%. Wherever you look in the grubby world of PFi, exorbitant profits are all but guaranteed.
Writing in the Mail, Norman cites the now familiar story of public buildings being charged astronomical fees for simple maintenance work and additions to the building. To have a TV aerial fitted, Hereford County hospital was charged £963. Still, compared to £333 to change a light bulb this seems almost reasonable. Similar tales of eye-watering maintenance charges have been another regular feature of the PFi saga.
Before any talk of private contractors benignly agreeing to cutbacks, the details of all contracts and maintenance fees should be made public. As the Conservatives have repeatedly explained, there is no accountability without transparency, yet PFi contracts still remain firmly behind closed doors, exempted from Freedom of Information enquiries on grounds of “commercial confidentiality”. Once the precise details of our commitments are in the public domain, the sort of scandalous charges Norman mentions would make easy pickings for renegotiations.
It is to Norman’s credit that he is addressing the issue of PFi, but £500 million would represent little more than a token gesture when considered against the size of the public’s liabilities and the appalling value for money many of these deals represent. Across the floor, if Ed Miliband is serious about turning the page on New Labour, a show of responsibility for PFi and a willingness to repair some of the damage would be welcome indeed.