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PFI firms ‘cashing in at our expense’ warns Unison

Unison has backed calls for a windfall tax on private finance initiative (PFI) companies after claiming they are ‘cashing in at our expense’.

The trade union said a windfall tax could ‘prove a lifeline to under pressure public services’ as it announced it was backing two amendments to the finance bill, set to be tabled by the Labour backbench MP Stella Creasy later this week in Parliament, to introduce a one-off levy of PFI firms.

The trade union’s general secretary, Dave Prentis said ‘eye-wateringly high’ PFI payments are threatening to overwhelm ‘already cash-strapped public services’.

The use of long-running PFI contracts to pay for the building and maintenance of schools and hospitals has been controversial for sometime, but the subject has come under fresh scrutiny following the collapse of the construction giant Carillion last month.

New research published this week by the Centre for Health and the Public Interest has claimed local authorities in England have paid just over £7bn for schools and other education facilities built under PFI between 2010 and 2016.

According to the research, there are 172 contracts currently running with a total capital value of £28.4bn.

‘Over the lifetime of these contracts, taxpayers will pay £32bn for these contracts which include the building and refurbishment of schools, as well as the provision of facilities maintenance services, such as cleaning and repairs,’ the research states.

It also claims the companies that hold education PFI contracts have made profits of more than £329m over the past seven years, and of those profits £180m have been paid out as dividends to shareholders.

And last month, the National Audit Office published a report, which shows there are currently over 700 operational PFI with a capital value of around £60bn in the UK.

According to the report, the annual charges for these deals amounted to £10.3bn in 2016-17 and even if no new deals are entered into, future charges which continue until the 2040s amount to £199bn.

‘Local communities may now have shiny new schools and hospitals, but at huge cost,’ said Mr Prentis.

‘The repayments on PFI debt have to be made first, and are so steep that teaching assistants are losing their jobs and patient services are being cut back.

‘There’s no time to lose,’ added the general secretary. ‘Crippling PFI debts are pushing local services to the brink and costing taxpayers dear. It’s time for a windfall tax on the companies cashing in at our expense.

‘It would bring some urgent and much-needed relief for the services we rely upon.’

  • Read the Centre for Health and the Public Interest research here:

 

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