The most ostensibly boring things often turn out to be of critical importance.
PFI falls into this category. The Treasury Select Committee has demanded substantial and immediate reform of the scheme. The committee’s report lambasts
the government for overusing PFI to keep costs off departmental balance sheets and calls for much greater transparency to ensure value for money.
An estimated £67 billion is immersed in projects currently, while the Office for Budget Responsibility says that outstanding debts would add £35 billion to the already distended national debt if they were included on balance sheets. But these are only estimates conjured from the dark, which is why figures you might see in the press often vary. The FT, for instance, has uncovered a separate PFI interest debt of £20bn.
Committee chairman, Andrew Tyrie, has been across the airwaves this morning making the case for total transparency. He told the Today programme. He told the Today programme:
“The whole thing has got out of hand, and it is the taxpayer who has been ripped off…We need to bring PFI fully on balance sheet so there is full transparency. The headline figure we owe as a country will increase, but I think it has to be done…We need to sort out the accounting so we can all see exactly what is going on. Make sure that departments don’t have an incentive to go for PFIs over other schemes.
The second thing, we need a full Treasury review of the rules and the appraisal system on how these deals take place. We need a very vigorous assessment of risk transfer – who really
bears the risk when these projects go wrong…A coach and horses has been driven through the risk transfer.”
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