A Union leader has warned that jobs and services could be affected by a £230bn Private Finance Initiative (PFI) “iceberg” looming in the public sector.
The £65bn PFI bill for hospitals, which has been recently revealed, is only a small amount of the total cost of initiatives that the public will have to pay for, the GMB said.
The £230bn cost of more than 650 PFI projects will not be cleared until 2048, national officer Brian Strutton said.
After analysing Treasury data, Mr Strutton warned that the total PFI debt is equivalent to £9,300 per person, as private contractors demand above-inflation returns and the debt “mountain” increases.
He maintained that including the £44bn already handed over for PFI schemes up to 2009-10, the public purse will be hit with a total PFI bill of more than £270bn, which is almost five times the value of the assets built.
Mr Strutton said: “This research shows what a terrible deal PFI is for the taxpayer. Rising debt levels are forcing hard-hit public agencies to cut services to save money.
“Exorbitant costs are creating a PFI future funding black hole of £230bn, on top of the £44bn already paid, that many hospital trusts and other public bodies are already finding impossible to fill.”
Copyright © Press Association 2010
Your comments (terms and conditions apply):
“Yes I remember reading many such warnings that this was a way of keeping this debt ‘off the book’. All the chickens are now coming home to roost. God help us” – Nurse, Lancs
“Yes, I do agree and what is more important the government of the time were warned that this would happen” – Mike, Sheffield
Category => Finance
Category => News
Category => Premises
Maximise your practice's financial potential and compare your performance with peers with Pulse Intelligence. Register for a 30 day free trial.