By Max Clarke
The Confederation of British Industry (CBI) and public sector workers’ union UNISON have commented today on the Committee of Public Accounts’ report on the use of the Private Finance Initiative (PFI) in housing and hospitals.
Introduced by the John Major government as a means of injecting private financial backing into community projects and moving debts away from the treasury in the process, the PFI scheme was pursued by Gordon Brown during his time as chancellor and has to date led to the development of countless hospitals and schools across the country.
PFIs have been attacked by some including the 1.3 million strong public sector union, Unison, as being an elaborate scam enabling private sector investors to profit from taxpayer’s money, and that privately run schemes focus on profitability at the cost of the quality of service offered.
Offering diametrically opposing viewpoints on the benefits and flaws of PFI schemes are the Confederation of British Industry (CBI)- representing 240,000 privately owned businesses; and Unison- the 1.3 million strong public sector union.
Elizabeth Fells, CBI Head of Public Services Reform, said:
“PFI has resulted in hundreds of hospitals, homes and schools being built, benefiting communities up and down the land. It is an established and successful way of developing and maintaining infrastructure, with the majority of projects delivered on time and on budget.
“With the public finances constrained, the role of the private sector in supporting new infrastructure will become even more important. Any moves to challenge existing contracts will undermine private sector confidence, jeopardising future investment in crucial infrastructure projects.
“As the Committee has previously noted, the Government needs a variety of finance options available to it. These should include new methods, such as Tax Increment Funding and Pension Fund Financing, as well as PFI."
UNISON, on the other hand, claim that the “Private Finance Initiative has failed to deliver quality and has cost taxpayers a packet”.
Dave Prentis, General Secretary of UNISON, said:
“Reading this latest Public Accounts Committee report into PFI gives me a strong sense of déjà vue. The Public Accounts Committee findings once again echo what UNISON has been saying about PFI for many years - that it was the only show in town.
“Councils and NHS trusts were bulldozed into going down the PFI route and now they are paying a high price.
“Both Conservative and Liberal Democrat parties were keen to criticise PFI when they were in opposition, but now that they are in government, PFI remains their funding method of choice, insofar as investments are going ahead.
“Whilst the government may have changed, the huge, unjustified profits being taken out of the public sector finances through PFI , remain the same.”