Date: Tuesday 2 October 2007
New figures compiled from official documents confirm that billions
of pounds are being wasted on PFI and PPP projects in Scotland.
UNISON Scotland today revealed two key figures from the largest
ever study of official PFI documents, looking at the 'value for
money' claims used to justify building new schools and hospitals
with private funding.
These show firstly that the controversial Private Finance Initiative
and other forms of Public Private Partnerships could be costing
Scottish taxpayers around £2.1 billion more than conventional funding.
Secondly, this extra cost is supposedly justified by claiming that
£3.5 billion of risk has been transferred to the private sector
- a figure UNISON Scotland likens to a rip-off £3.5 billion insurance
Scottish Organiser Dave Watson said that in fact ultimately the
risk is borne by the taxpayer, as shown by the recent collapse of
London Underground contractor Metronet.
He said: "Our research published today confirms from the official
figures that the scandal that is PFI is costing taxpayers in Scotland
billions of pounds more than public sector funding. "Documents show
that funding new schools and hospitals the conventional way could
cost around £2.1 billion less. They also show that £3.5 billion
has been added to the taxpayers' bill, to massage the figures in
favour of private funding.
"These are just two figures from the range of ways in which private
companies are profiteering at the expense of school children, hospital
patients and taxpayers. Other factors include refinancing, high
rates of return, the higher cost of private financing, land sales
and the PFI private equity market.
"Unfortunately too often the financial figures are kept from the
public due to claimed commercial confidentiality.
"We totally dispute the rigged calculations used to justify PFI
and PPP schemes. All the figures should be provided for public scrutiny.
And we believe that the £3.5 billion 'insurance' policy against
problems with the contracts, and rising costs, could be secured
far more cheaply."
The report "At
What Cost" also lists immediate steps the Scottish Government
could take to prevent further billions being wasted. Mr Watson added:
"We want to see all existing contracts reviewed and no new PPP contracts
approved. Scottish Government grants should be made available for
all new capital projects on a proper level playing field basis,
regardless of the method of procurement."
For further information please contact: Dave Watson (Scottish
Organiser) 07958 122 409(m) Fiona Montgomery(Information Development
officer) 0141 342 2852(w)
Notes to Editors:
1. The report, At What Cost, examines the Final Business Cases
for 35 projects and extrapolates these key figures to the 129 current
and planned projects.
2. The report, including tables showing figures for the 35 projects
covered, is available online from the afternoon of Monday 1 October,
3. Last week the Scottish Parliament Finance Committee announced
an inquiry into the funding of capital projects. This report and
other evidence will be provided to the Committee.
4. UNISON Scotland is also making a number of appeals to the Scottish
Information Commissioner challenging attempts by public bodies to
keep PFI/PPP financial information secret based on 'commercial confidentiality'.
We support bringing companies involved in PFI/PPP contracts under
the scope of Scottish Freedom of Information legislation.
5. An example of the problems in obtaining documents is detailed
in the report (Note 16). Incredibly neither the Scottish Executive
nor Scottish Water could provide a single Final Business Case for
any of the nine water treatment projects, claiming they are 'not