Private Finance Initiative - Treasury Contents

Written evidence submitted by Lisa Smeaton

I write as a member of the public. I have had grave concerns about the use of PFI since its inception. My concerns are wide-ranging and include the following key points:

1.  The use of PFI appears to be a government "credit-card" where expenditure can be put despite it being an expensive form of borrowing particularly in the current climate and consequently offers very poor value for money to the tax payer.

2.  PFI also is "off the books". I think this is a foolish and unprofessional way for a Government to operate its finances. It is used to avoid this debt showing on deficient figures. It seems ludicrous to make substantial cuts in all areas of government in the current climate and at the same time to continue using PFI because it "hides" the debt.

3.  PFI represents a millstone around the necks of the children of this country who will be forced to pay off this debt for years to come.

4.  Politicians may feel that PFI means that risk is shared and construction costs reduced but, I can assure you, that construction companies are far more financially savvy than most politicians and profit will be made, in the long term, via maintenance and leasing. Of course construction companies must be given the opportunity to make a profit but it would be far more sensible for these companies to be allowed to make their profit during the construction of a hospital/school etc not in some complicated, long term arrangement. In the current climate, with less industrial projects taking place, it would actually be easier for the government to achieve very good value for money in traditional contractual arrangements due to competition between contractors.

5.  Both Mr Osborne and Mr Cable made very clear statements about the use of PFI during the election including comments such as a "discredited" mode (Osborne) and "a dishonest system of accounting, designed to hide taxpayers' liabilities" (Cable). Given those comments I think it would be entirely acceptable for the public to imagine that the use of PFI would have been substantially changed and/or discontinued particularly given Mr Osborne and Mr Cable's role in Government. To find that the Government has now approved 61 PFI projects in less than 12 months is truly a disgrace and again demonstrates why the general public have so little confidence or respect for politicians.

I would be grateful if my comments could be taken into consideration.

April 2011

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