MPs today released a report condemning PFI arrangements for projects such as hospitals and schools as poor value for money.
Analysis commissioned by the Treasury Select Committee indicates that paying off a PFI debt of £1bn may cost taxpayers the same as paying off a direct government debt of £1.7bn.
The system is known for keeping large-scale, high cost schemes off the government’s balance sheet. But the committee said this should be halted. “PFI should be brought on balance sheet,” said committee chairman Andrew Tyrie. “The Treasury should remove any perverse incentives unrelated to value for money by ensuring that PFI is not used to circumvent departmental budget limits.”
The committee recommendations include ensuring the Treasury considers scoring PFIs in departmental budgets in the same way as direct capital expenditure and opening up the Value for Money assesment process undertaken for PFIs to scrunity by public spending watchdog the National Audit Office.