Saturday Observer: Revealed - £525m cost of Kent's PFI schemes
Private finance initiatives worth more than £525 million have been built or agreed in the last 10 years in Kent.
Figures obtained in Parliament by a Tory MP revealed PFI projects completed and under way around the UK since 1997.
They shed light on the billions of pounds being spent nationally on the controversial schemes.
During the last decade, figures from the Treasury show a total of £525.57m was committed to the capital cost alone of PFI projects in Kent, including Bromley and Bexley.
Jacqui Lait, the Conservative MP for Beckenham, said she was worried about the massive debt being racked up by PFI.
“I am seriously concerned about the impact on the whole of the UK economy of huge overhang of spending that not only requires to be paid back but obviously is being charged interest,” she told Kent on Sunday.
Reckless
The MP said she feared PFI could lead to “exceedingly reckless over-spending” if the Government was not careful.
She added: “I don’t have a problem with the investment, so long as we can actually afford to pay it back.”
The £525m figure does not include running costs for projects and interest.
PFI was originally conceived by the Conservative Party under John Major but was embraced with gusto by Labour when it won power in 1997.
Under the schemes, private companies raise capital for public projects. The Government then repays the money over a period of time. Often the amount repaid is three times the original cost, like a mortgage.
There have been concerns raised over some PFI projects where companies have been accused of putting profits first.
Trade unions have argued that it is a form of privatisation by the back door and resent the fact that private firms are making huge profits at public expense.
Shareholders made a hefty £37m in less than three years from the PFI contract to build and maintain Darent Valley Hospital in Dartford.
Other Kent PFI projects include the £100m Sheppey Crossing, which triggered safety concerns from the police when it was opened a year ago.
Corin Taylor, of the TaxPayers’ Alliance, told KoS that PFI deals were not good value for money. “PFI comes at an enormous cost to taxpayers, which has to be paid back over many years,” he said. “While it has the potential to cut delays to building projects, some are more suited to PFI than others and it is worrying that so many have gone over-budget.
“Often this is because contracts aren’t properly drawn up at the start and firms then make millions in refinancing deals when the spec changes.”
But ministers say that PFI is the best way of delivering public projects quickly, and the scheme has been copied by governments around the world such as Brazil and Norway.
Former Health Secretary Alan Milburn famously dismissed criticism of PFI by saying it was “the only show in town”.
Prime Minister Gordon Brown’s announcement this month that he wanted to see three million new houses built by 2020 was seen as a boost for new PFI deals.
Figures obtained in Parliament by a Tory MP revealed PFI projects completed and under way around the UK since 1997.
They shed light on the billions of pounds being spent nationally on the controversial schemes.
During the last decade, figures from the Treasury show a total of £525.57m was committed to the capital cost alone of PFI projects in Kent, including Bromley and Bexley.
Jacqui Lait, the Conservative MP for Beckenham, said she was worried about the massive debt being racked up by PFI.
“I am seriously concerned about the impact on the whole of the UK economy of huge overhang of spending that not only requires to be paid back but obviously is being charged interest,” she told Kent on Sunday.
Reckless
The MP said she feared PFI could lead to “exceedingly reckless over-spending” if the Government was not careful.
She added: “I don’t have a problem with the investment, so long as we can actually afford to pay it back.”
The £525m figure does not include running costs for projects and interest.
PFI was originally conceived by the Conservative Party under John Major but was embraced with gusto by Labour when it won power in 1997.
Under the schemes, private companies raise capital for public projects. The Government then repays the money over a period of time. Often the amount repaid is three times the original cost, like a mortgage.
There have been concerns raised over some PFI projects where companies have been accused of putting profits first.
Trade unions have argued that it is a form of privatisation by the back door and resent the fact that private firms are making huge profits at public expense.
Shareholders made a hefty £37m in less than three years from the PFI contract to build and maintain Darent Valley Hospital in Dartford.
Other Kent PFI projects include the £100m Sheppey Crossing, which triggered safety concerns from the police when it was opened a year ago.
Corin Taylor, of the TaxPayers’ Alliance, told KoS that PFI deals were not good value for money. “PFI comes at an enormous cost to taxpayers, which has to be paid back over many years,” he said. “While it has the potential to cut delays to building projects, some are more suited to PFI than others and it is worrying that so many have gone over-budget.
“Often this is because contracts aren’t properly drawn up at the start and firms then make millions in refinancing deals when the spec changes.”
But ministers say that PFI is the best way of delivering public projects quickly, and the scheme has been copied by governments around the world such as Brazil and Norway.
Former Health Secretary Alan Milburn famously dismissed criticism of PFI by saying it was “the only show in town”.
Prime Minister Gordon Brown’s announcement this month that he wanted to see three million new houses built by 2020 was seen as a boost for new PFI deals.
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