John McDonnell pledges to bring all PFI contracts back into public sector
Speaking at the Labour conference, McDonnell said he wanted to end the “scandal” of private firms making huge profits on the back of deals to build hospitals and schools
John McDonnell - image credit: PA
A Labour government would bring all Private Finance Initiative contracts back into the public sector, shadow chancellor John McDonnell has declared.
Speaking at the Labour conference, McDonnell said he wanted to end the “scandal” of private firms making huge profits on the back of deals to build hospitals and schools.
Under PFI, privately-run consortiums agree to build major public construction projects, with taxpayers picking up the repayment bill.
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Scottish Labour leadership candidate Richard Leonard backed the plan, saying it was: “time to end PFI waste” while calling on the Scottish Government to “lead the way”.
In his speech in Brighton, McDonnell said that “over the next few decades, nearly two hundred billion is scheduled to be paid out of public sector budgets in PFI deals”.
He said that in the NHS alone, £831m in pre-tax profits have been made by private firms involved in PFI contracts.
The shadow chancellor said Labour had already pledged not to sign any new PFI deals if it comes to power at the next election.
And he added: “We will go further. I can tell you today, it’s what you’ve been calling for. We’ll bring existing PFI contracts back in-house.”
Responding to the pledge, Leonard said: “Scotland has a huge liability to PFI and the Scottish Government’s Non-Profit Distributing scheme. The Scottish Government could and should set up a debt disposal department dedicated to raising funds to buy out the total outstanding £28.8bn PFI and NPD debt on operational contracts.
He said: “Doing this could save the public purse hundreds of millions of pounds. If I’m Labour leader I’ll be pressing them on this issue and as a Labour First Minister it will be a priority.”
Elsewhere in his speech, the shadow chancellor said the next Labour government was “in sight” and its performance will be “will be measured by the care we show to all our people and the richness of their lives”.
He added: “We proved in the election, and we will now go on to prove in government, our belief that hope will always overcome fear, kindness and generosity will always overcome greedy self-interest and that the flame of solidarity in our society will never be extinguished.
“For years we have proclaimed that “Another World is Possible.” I tell you now, that world is not just possible, it is in sight. Let’s create it together.”
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