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Tuesday, February 27, 2024

PFI companies urged to pay money

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Companies that benefit under the private finance initiative (PFI) have been urged to pay some money back to help protect public services

Companies that benefit from Government contracts worth hundreds of billions of pounds under the private finance initiative (PFI) have been urged to pay some of it back to help protect public services.

A national PFI Rebate Campaign was launched at the House of Commons with the backing of more than 50 MPs, calling for companies to accept a 0.05% reduction in payments.

Campaigners say the rebate would raise £500 million in savings for schools, hospitals and other PFI projects.

The previous Labour administration relied heavily on PFI for the construction and maintenance of public sector buildings and the long-term provision of services.

The initiative was designed to speed up the renewal of public service infrastructure, but left councils and health authorities with massive bills to private companies to be repaid over many years.

A total of around 800 PFI contracts are in operation with a capital value of around £64 billion, according to a House of Lords report earlier this year. Some £267 billion in repayments are due to be made to private companies over the coming 50 years.

Conservative MP Jesse Norman (Hereford and South Herefordshire) said: “Under Gordon Brown, the decision was made to push PFIs wherever possible, putting huge pressure on schools and hospitals to contract out not just on the construction process but also on long-term provision of services.

“The PFI obligations taken out on Mr Brown’s watch now total over £200 billion, and will cost this country for decades.

“We are seeking a very modest saving of 0.05% on the payments under PFI.

“The major PFI companies include Innisfree, Semperian, Serco, Balfour Beatty, HSBC, Lloyds and RBS. These firms have done extremely well out of PFI over the past decade, and it is right that they should contribute now to our national economic recovery. In these difficult economic times, no one should be exempt.”

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