The government should call time on the Private Finance Initiative (PFI), which will cost £217 billion in repayments over the next 25 years, says a report from the Unison union.
It says the system of borrowing from the private sector to hide public debt “has been a long and wasteful experiment” which “it is time to bring to a close”.
The figure of £217 billion accounts for all repayments between now and 2033-34 on all PFI projects for hospitals, schools and other public sector schemes.
The study says, “All further PFI schemes should be halted.
“The next logical step is to reform existing schemes, first by removing all soft services (such as cleaning and catering in hospitals) from contracts, and ultimately by bringing all PFI contracts under public ownership and control.”
The report condemns the financial mechanism as being “simply an expensive way to make the short-term borrowing figures look better by keeping these projects off the government’s balance sheet”.
Labour has succeeded in keeping the accumulated PFI debts out of the government’s public accounts. “Schools, hospitals and transport projects are simply too important, too vital to the public interest, to be allowed to fail.”
The report adds that the profits for PFI private investors have been huge.