Call for transparency over Yorkshire councils' £13bn PFI contracts

The Yorkshire Post published details on Saturday of the PFI contracts signed by town hall leaders across the region for facilities such as schools, homes and waste centres, which will cost the public purse more than £13bn by the time the final agreement concludes in 2042.

Among the most controversial PFI schemes is Sheffield City Council’s £2bn Streets Ahead highway maintenance contract with Amey, a 25-year deal which saw £55m paid to the private contractor last year.

Thousands of trees have been replaced as part of the controversial scheme, though campaigners, a number of whom have been arrested during protests, say healthy trees are being pulled up.

It was claimed this week at Leeds Crown Court, where the council is seeking an injunction against some of the campaigners, that this was done because it was the most profitable option under the PFI contract.

The deal, signed in 2012 by the city’s Labour administration, who took control after two decades where they alternated in power regularly with the Liberal Democrats, is one of three PFI deals done by the authority.

The others are for the council’s Howden House HQ, a deal signed in 1999 which will ultimately cost tax-payers £148m, and another for 16 schools, which will cost £876m over 25 years.

Shaffaq Mohammed, leader of the Sheffield Lib Dems, told The Yorkshire Post: “I do not think that PFIs in themselves are a concern as in many cases they have proved to be a successful and have provided good value for tax-payers’ money.

“Even before the 2007 financial crisis, Sheffield City Council would have struggled to deliver the £2.2billion investment needed to bring Sheffield’s road and streets up to standard.

“What does concern me however is a lack of transparency surrounding these contracts and a lack of accountability when things do not go to plan.

“When such large amounts of taxpayer money is being spent on PFI arrangements, they should be subject to the same Freedom of Information rules as the public sector, so both the contractors and councils can be held accountable and members of the public are reassured that their taxes are being spend wisely.”

The Amey deal is the biggest ever to be signed by a Yorkshire council, and includes £1.2bn of PFI credits to help pay for it.

Coun Olivia Blake, the council’s Deputy Leader, said: “We have used government sponsored Private Finance Initiative contracts to fund much needed infrastructure projects, often as the only mechanism that would make these affordable.

“However this is not our preferred approach and we have used it where we have had no alternative.

“A significant proportion are for school buildings which were required by Government to be PFI, and they are now mostly academy schools so paid for largely by the Department for Education.

“The contracts are competitively tendered and the transfer of risks to the PFI providers means the infrastructure and assets are maintained during the long-term contracts, benefiting the city.”

In Hull, where contracts for schools, a health centre and housing have been signed, the total to be paid back is £467m, for buildings with a capital value of £143m.

The council told The Yorkshire Post that all its schemes had been ‘certified’ as providing value for money, and without the PFI funding would have not have proceeded.

Confirming that it would look at using PFI again in the future, a spokeswoman said: “It is important to note the contract payments under PFI include, in addition to the financing costs associated with the initial capital investment, insurance costs and the lifecycle modelling costs for 25 years which puts the responsibility upon the contractor for maintenance and repair for the 25 years of the contract.”

In Wakefield, PFI schemes will see £907m paid to finance a street lighting scheme and a waste management site.

Andrew Wallhead, Corporate Director for Regeneration and Economic Growth at Wakefield Council, said: “We recognise that PFI is not the answer to everything, but it is right for some projects.

“The council’s street lighting PFI contract has meant we have benefitted from expertise to significantly upgrade the infrastructure and improve the quality of the service.

“We have also partnered in a PFI with Shanks, which has expertise in using new technology to increase recycling rates in our district and reduce the amount of waste going to landfill.”