PFI time bomb

The cost of Britain’s controversial private finance initiative (PFI) will continue to soar for another five years and end up costing taxpayers more than £300 billion, according to a Guardian analysis of contracts that were sanctioned by the Treasury.

Despite recent coalition criticism suggesting that the government was going cold on the scheme, recently published figures indicate that repayments will continue ballooning until they peak at £10.1 billion a year by 2017-18.

The 717 PFI contracts currently under way across the UK are funding new schools, hospitals and other public facilities with a total capital value of £54.7 billion, but the overall ultimate cost will reach £301 billion by the time they have been paid off over the coming decades.

Much of this difference is due to ongoing running costs built into the contracts, but the schemes have also been criticised for providing poor value for money compared with the interest rates the government would pay if it borrowed money directly to pay for the schemes.

www.guardian.co.uk/politics/2012/jul/05/pfi-cost-300bn