Green councillors oppose private finance for city roads

Members of Sheffield City Council’s Green Party yesterday put forward a formal motion calling for the authority’s forthcoming 25-year highways deal with a private contractor to be delayed, amidst concerns that hundreds of millions of pounds of public money will be spent on expensive interest payments as part of the deal.

Sheffield’s £2bn Highways Maintenance contract, due to be signed off early next year, will be Britain’s biggest-ever council project using the Private Finance Initiative (PFI), a controversial funding method now seen as “discredited” by the Treasury after reports concluded it was inefficient and wasted public money.

Chancellor George Osborne has announced a fundamental review of PFI, but in the meantime is allowing new projects already close to completion to proceed.

These include plans to build a controversial PFI incinerator in North Yorkshire. On Saturday the Yorkshire Post revealed more than £400m of taxpayers’ money is likely to be spent on debt financing as part of that £1.45bn, 25-year deal.

But even that project is dwarfed by the Sheffield scheme, which will see all responsibility for street maintenance handed to a private firm for the next quarter-century.

It has been generally welcomed in Sheffield, with the Government providing £1.2bn to bring every single street in the city up to a high standard as part of the £2bn deal.

But Green councillor Rob Murphy pointed to figures suggesting only half the Government’s investment would actually be spent on roads, with the rest funding debt financing and profits for the unnamed private contractor.

“We all realise Sheffield’s roads are in an appalling state due to decades of underfunding, but it makes no sense for Sheffield Council to plough on with the biggest-ever local government PFI at a time everyone else is realising what a poor deal PFI is,” he said.

“Future council tax payers will pay a heavy price if this scheme goes ahead and locks us into a 25-year contract.”

His party’s motion was expected to be rejected at yesterday’s full council meeting, however, with the ruling Labour group giving its full backing to the deal.

Councillors say it is worth using PFI if it means securing a huge Government grant for the city.

Councillor Leigh Bramall, Cabinet member for transport, said: “The state of Sheffield’s roads is a major concern, and it is important action is taken. The previous Labour Government made money available for the PFI scheme to repair the city’s highways in their entirety, and we believe this is welcomed by local people.

“Labour are keen to take the scheme forward... we are pleased it is due to start next year.”