UNISON yesterday demanded ‘an end to this bottomless PFI pit’.
The Treasury’s decision to pump an extra £2bn of taxpayers’ money into recession-hit PFI projects is ‘throwing good money after bad’, Unison warned in a report issued at its annual conference in Brighton yesterday.
PFI’s reliance on the private sector was supposed to give public building programmes more rigour and strength but, as the union’s latest report, ‘Putting the Public Back into PFI’, shows, in reality it has exposed them to greater hazards and weaknesses.
Public projects have been tainted by private failure.
The report catalogues how ever-growing billions of public money has become locked into financing massively expensive PFI schemes.
The government has committed taxpayers, for a generation to come, to a bill of more than £217bn worth of repayments between now and 2033/34 on at least £64bn of PFI projects.
Unison is calling for an end to this bottomless PFI pit and for all new planned PFI projects to be replaced with publicly funded design and build schemes.
Unison general secretary Dave Prentis said: ‘Public projects have become tainted by private failure.
‘PFI has been a long and wasteful experiment and it is time to bring it to a close.
‘We should look forward, instead, to a more efficient, more flexible and ultimately more valuable way of building the schools and hospitals we need.
‘The recession has put the final nail in the PFI coffin and publicly funded design and build schemes should be the future.
‘The government must face facts and start working on ways to bring PFI contracts back into public ownership where they belong.
‘Now that private finance has dried up, with bank lending almost halted, the Treasury is pumping £2bn into PFI schemes to prop up the private sector to keep the flow of deals.
‘This is simply throwing good money after bad.’
Unison’s report shows how PFI consortia continue to make huge profits at the expense of the taxpayer, on contracts that are inflexible, complex and often lead to poor design.
PFI projects are also hugely complex and slow, and tie managers running hospitals and schools into inflexible, 30-year contracts.
It highlights the irony of PFI schemes that are supposed to be privately funded but, because of the collapse in banks and lending, have had to turn to government for support.
At the same time the government has been forced into taking a stake in the same banks whose lending policies have caused the crisis and who in turn have been big lenders to PFI.
The current financial crisis highlights the danger of relying heavily on the private sector for key public building programmes.
PFI has failed to fully shift the risk of project failure on to the private sector, even though risk transfer is one of the founding principles of PFI.
As the Metronet Tube PPP fiasco showed, if a project runs into serious trouble, the public sector has to bail it out.
When Metronet went bust just four years into its £17bn, 30-year contract to modernise two thirds of the London Underground, it was Transport for London that picked up the £410m bill.