Prescott plan’s false economy

This financial farce, one akin to a Yes, Prime Minister script, has its origins almost a decade ago when the then Deputy Prime Minister wanted to regionalise the fire service.

His department authorised £13m to spent purchasing – and fitting out – a regional control centre at Wakefield. Eight other sites across Britain were also acquired at similar expense.

The Yorkshire hub also included a £6,000 deluxe coffee machine. But there was a catch – a catalogue of technical issues, and then a change of government, meant that Lord Prescott’s policy was scrapped after fears the new regional computer system would simply never work.

Yet, while the decision was the correct one on safety grounds, the lingering cost to the public purse is now obscene – the terms of the PFI deal signed off by Lord Prescott’s team mean that cash-strapped taxpayers are paying £5,000 every day in rent and other associated costs for these lavish premises.

This is the context in which the Government’s decision to offer £1m-plus incentives to firms to move into this “white elephant” should be viewed. If it means the offices are put to good use – and a tenant can make a contribution to the wider economy – then the adeptness of this approach should be applauded, if only to enable the coalition finally to cut its losses.

The problem then arises if no one wants to move into these offices because they can’t afford the exhorbitant rent – and the cost of reconfiguring the site to suit their own needs. The onus would then be on the Government to force a Whitehall department – or public body – to move to this site. The problem is that the relocation costs could soon outweigh the financial benefits. And so it goes on.

Only one very expensive lesson needs to be learned from this sorry saga. Because PFI has been proven to be a false economy, no future deal should be signed off without the Chancellor and Cabinet Secretary’s approval. It’s the only way to save the taxpayer from paying out £5,000 a day for an empty building that should be helping to lift Yorkshire’s economy out of the recession.