PFI Madness Costs Taxpayer £22.3billion

First blog in a wee while, but managed to make the front page of the Herald today. You can see the article at http://www.theherald.co.uk/news/news/display.var.1646070.0.0.php

Basically, I got an answer to a written question that I lodged with the Scottish government which indicates that the combined cost of Private Finance Initiative (PFI)/Public Private Partnerships (PPP) over the course of their contractual life is a quite astonishing £22.3billion.

This is a staggering amount of money to have lavished on the private sector at public expense; and the evidence indicates that it isn't the most cost effective mechanism. The National Audit Office studied the PFI-PPP tendering process earlier this year and stated that the long tendering process involved with PFI-PPP could have been avoided or mitigated in the public sector. Furthermore a 2002 Audit Scotland report into PFI-PPP contracts for renewing schools found that the cost of the scheme was generally 2.5% to 4.0% higher than a local authority might have paid if it had borrowed the money on its own account, resulting in roughly £200,000 to £300,000 a year for each £10million invested.

And Allyson Pollock established that in the NHS PFI-PPP led to a diversion of resources from clinical services, staff and supplies. In other words, money being syphoned from front line services into private pockets.

Thankfully the new SNP administration is working away to come up with a not for profit model of financing infrastructure projects, which will result in greater financial efficiency for the public purse and an end to the private profiteering at the hands of public services. Indeed, Kenny MacAskill, the Cabinet Secretary for Justice served notice of SNP intentions when he announced that the proposed new prison at Low Moss will not be privately run.

Ensuring that public services are maintained by the public sector was a priority for the voters during the Scottish Parliament election campaign - as determined in a BBC opinion poll. It is a priority for the SNP too.

If you want to see details of the answer to the question I lodged that sparked today's Herald article then have a look below:

S3W-2233 - Jamie Hepburn (Central Scotland) (SNP) (Date Lodged 18 July 2007) : To ask the Scottish Executive what the total cost to the taxpayer will be of all existing PFI/PPP projects over the course of their contractual life.

Answered by John Swinney (2 August 2007): The total estimated unitary charges for all existing PPP projects over their contractual life is £22.3 billion. This covers 102 PPP projects and spans the years 1999-2000 to 2040-41, a period of 42 years.