EVEN though it is exactly a year since Philip Hammond – the then Chancellor – announced that he was abolishing so-called PFI contracts for new infrastructure projects, the cost to taxpayers remains eyewatering.
Today a special investigation by JPIMedia, owners of The Yorkshire Post, reveals how the cost of new schools, hospitals and road upgrades has skyrocketed under the Private Finance Initiative.
And while taxpayers will be perplexed, with good reason, that the bill for private companies to build and maintain schools in the county has risen alone by at least £100m, it is estimated that the total bill for the whole country will reach £300bn by 2050.
An overall sum which is more than double NHS England’s annual budget, PFI – and its financial legacy – does need to be set in historical context. Originally devised by Norman Lamont during the early part of John Major’s premiership, it was Tony Blair and Gordon Brown who accelerated its use to pay for the new schools and hospitals which New Labour promised prior to the 1997 election.
This was in response to consternation about the state of hospitals and schools when pupils across the country were being taught in classrooms that were crumbling because of old-age – or health hazards like asbestos. And while today’s buildings are much-improved, there are many lessons to be learned as Boris Johnson promises new hospitals and record infrastructure investment as well as a critical decision on the future of HS2.
The key one is providing total transparency over funding – and making sure, from this day forward, that taxpayers’ money is spent is more wisely so it goes further. This means a stronger focus on the contractual small-print to ensure loan agreements cannot be exploited so ruthlessly and to the detriment of the public interest.