A recent treasury select committee investigating PFI has found that the price of financing projects and repaying investments is higher with a PFI than if the government financed projects itself.
The committee stated that government departments are too ready to use PFI to conceal debt and the argument that PFI transfers risk from government to private firms as “illusory”.
Due to the financing costs, and the repayment of money by the taxpayer over a 30 year period, paying off a £1bn debt through the PFI would be equivalent to paying off a £1.7bn debt by conventional means.
“PFI means getting something now and paying later. Any Whitehall department could be excused for becoming addicted to that – we can’t carry on as we are, expecting the next generation of taxpayers to pick up the tab.” said Andrew Tyrie MP.
All in all, a damming report on the use of PFI.