Union research attacks PFI debt burden
The private finance initiative is “a terrible deal” for British taxpayers, who are locked into paying £250bn on assets worth a quarter of that sum, the GMB has claimed.
A study by the union found that the UK as a whole has 641 PFI projects, with a further 100 in the pipeline. The GMB said PFI debt is now equivalent to £8,400 per taxpayer and claimed that this is set to grow further, with private contractors demanding above-inflation returns.
Scotland is making the biggest overall loss, the study suggested, with debts of more than £30bn on PFI assets worth £6bn. There, the bill for PFI equates to £12,000 for every Scottish taxpayer. “Wales has the biggest debt balloon, owing over 600% the value of its PFI assets,” the union added.
The GMB argued that PFI costs are higher than normal public finance as private firms cannot raise funds as cheaply as the government. The recession has also increased the cost of private-sector borrowing.
GMB National Secretary for Public Services Brian Strutton said: “Rising debt levels are forcing hard-hit public agencies to cut services. The public is paying over the odds on PFI projects, with debt ratios in most areas at over 500%. This is like paying for schools and hospitals by credit card.
“Exorbitant costs are creating a PFI funding black hole of £250bn that many hospital trusts and other public bodies are already finding impossible to fill.”
Strutton called for a return to sound public-finance investment in public-sector projects. “We should stop any more PFI deals and bring others back into the public sector to relieve the taxpayer of the huge potential cost,” he added.
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The private finance initiative is “a terrible deal” for British taxpayers, who are locked into paying £250bn on assets worth a quarter of that sum, the GMB has claimed.
A study by the union found that the UK as a whole has 641 PFI projects, with a further 100 in the pipeline. The GMB said PFI debt is now equivalent to £8,400 per taxpayer and claimed that this is set to grow further, with private contractors demanding above-inflation returns.
Scotland is making the biggest overall loss, the study suggested, with debts of more than £30bn on PFI assets worth £6bn. There, the bill for PFI equates to £12,000 for every Scottish taxpayer. “Wales has the biggest debt balloon, owing over 600% the value of its PFI assets,” the union added.
The GMB argued that PFI costs are higher than normal public finance as private firms cannot raise funds as cheaply as the government. The recession has also increased the cost of private-sector borrowing.
GMB National Secretary for Public Services Brian Strutton said: “Rising debt levels are forcing hard-hit public agencies to cut services. The public is paying over the odds on PFI projects, with debt ratios in most areas at over 500%. This is like paying for schools and hospitals by credit card.
“Exorbitant costs are creating a PFI funding black hole of £250bn that many hospital trusts and other public bodies are already finding impossible to fill.”
Strutton called for a return to sound public-finance investment in public-sector projects. “We should stop any more PFI deals and bring others back into the public sector to relieve the taxpayer of the huge potential cost,” he added.
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