Private Finance Initiative

Thank you, Mrs Main. I appreciate your candour in admitting that you have had very little to do with PFI. I thank my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for securing the debate. I commend his initiative and his ongoing campaign. I am not sure whether he has been nominated, but he is certainly my Back Bencher of the year for the work that he has done on PFI. It is a great scandal, Mrs Main, that this debate is being held in Westminster Hall. It is always good to debate PFI, but I feel that something of such importance—an emerging scandal that people are only just waking up to—should have been debated in the Chamber, with the full prominence that would be given there. I was also concerned to hear earlier that evaluation of PFI projects is not being undertaken by the Treasury. Will the Minister tell us whether that can be reversed? Before I talk about some of the challenges of PFI, I want to assure people that I am not fundamentally opposed to PFI in principle; my concern is the legacy. We have heard many stories about that. The legacy has been a disaster and has tarnished the name of PFI, which could have been a force for good. It is a classic case of off-balance sheet financing. Not only will our generation pay for it, but future generations will continue to pay for that, as well as all the other debt accumulated by the previous, profligate Government. On early memories and anecdotes that hon. Members were relating, I will not go on about light bulbs costing God knows what. However, I remember the first meeting of the all-party group on rural services when we heard from the deputy chief fire officer of a particular authority. His very last comment was, ““For God's sake, never allow me to sign another PFI contract again, because I didn't have a clue what I was doing. In hindsight, I recognise that I made a huge problem for my fire authority. Because of that, I shouldn't be here.”” But he then went on to use the usual defence: ““I didn't know what I was doing. My accountant said it was fine, so I just signed the contract.”” He was embarrassed, and it was good of him to say that, but that story is not unique. I am sure other hon. Members have heard such stories. Indeed, we all received a briefing from the NHS Confederation: a wringing-their-hands exercise about ““It was early in the '90s; we didn't know what we were doing; we've learned the practices now.”” I wonder whether they have. I sent a message back to the confederation to ask what advice it gave to its member hospitals and trusts. It said, ““It wasn't our role to do so. It was the role of the Treasury and the Department of Health.”” So I feel that a lot of buck-passing is going on. I know that that is in the past, but we are living with the costs today and will do so in future. I logged on to the Partnerships UK database to see what PFI projects were awarded to Suffolk. There were only four listed, which surprised me, because I know of at least two others. The most recent PFI contract is a 30-year contract to be shared with Norfolk, and it is for six new police investigation centres, as they are called. Basically, they will be the new police cells. This particular contract dwarfs all the others: the East Anglia courts; the Wattisham married quarters; the hospital trust's Garrett Anderson treatment and critical care centre in Ipswich; and indeed the fire and rescue service serviced accommodation PFI project. We are spending £61.3 million on six centres that will be the new places where people are detained. I challenged that before I was elected. I was told that we had to have the new centres because of the recommendations of the National Policing Improvement Agency. The cost over 30 years for the contract, including the servicing, is £294 million. The budget goes from about £6.7 million spread across the two authorities to more than £11 million. My hon. Friend the Member for Rugby (Mark Pawsey) alluded to that. In the days of decreasing budgets, when we are trying to tighten our belts, we face the enormous cost of a brand-new building, which, frankly, is going to be used by prisoners. I am sure many people in Suffolk will be disappointed to hear that we will probably be losing front-line police officers to pay for what I see as a rather gold-plated building. I genuinely hope that other savings will be found. I hope that we will improve our detection rates so extraordinarily that we will make the savings. I hope that people will not feel that they have got the bobby in the car driving people hundreds of miles back and forth between the detention centres, homes and courts instead of having the bobby on the beat. I hope that we will not be regretting this in the next few years. Other projects have caught my eye. Apparently, the M1-A1 link road is a shadow toll road. As part of the PFI contract, the Government pay a fee—a toll—to the company. The numbers of journeys are more than double what was originally estimated, so the Government are happily paying through the nose for that. To be fair, as has already been suggested, I do not believe that we should condemn the private sector for how it has made significant amounts of money. Much of the fault lies with us as clients. People should look themselves in the mirror when they recognise the profits that they make from PFI. I have a wealthy constituent who stopped speaking to his brother because he was so ashamed of how much money he was knowingly making out of some of the contracts. He recognised that he did not have a sophisticated client. Just a few weeks ago, the Government released their construction strategy in which they recognised that 80% of the challenges have been within internal processes. Change orders, which were mentioned earlier, classically add so much to the cost of a particular project, as does the lack of sophisticated negotiating. The Government are trying to change that, which is to be welcomed. The last piece will be for the construction team, along with financing, to come together and ensure that we have a simpler, focused contract that is flexible and appropriate for future needs. As for the way ahead, I wish my hon. Friend the Member for Hereford and South Herefordshire would name and shame those institutions that have thus far not consented to voluntary repayments. I would also like to hear the results of Lord Sassoon's review on the renegotiation of contracts, which was initiated in February. I am delighted to hear that PFI is no longer the default place in which to look for capital; there are other sources available. Unlike under the previous Administration, it is not the only game in town. I am glad to see that we have a more balanced potential source of capital funding for the future. I shall conclude, because I recognise that others wish to speak. PFI will be one of the greatest scandals, so I congratulate my hon. Friend on bringing it to the attention of the House. Let us keep up the volume to ensure that this scandal is not repeated.