What is PFI?

PFI stands for ‘private finance initiative’ and it’s a way to finance public services by getting the private sector to front up the cash for building and maintaining things like schools and hospitals - the government then pays them back with interest over 20 to 30 years.

This has had disastrous consequences as PFI has proven to be expensive, risky and drives down the quality of employment.

The collapse of Carillion shows that when the private sector fails our public services it's working people that pay the price. PFI works for the few, not the many.

There are currently over 700 PFI deals worth around £60 billion. Even if no new deals are signed taxpayers are on the hook for £199 billion in repayments stretching into the 2040s - making the public service funding crisis even worse.

That's why we are calling on the government to:

1) Rule out signing any new PFI contracts

2) Conduct a rolling programme of reviews of PFI contracts involving all stakeholders including service users, trade unions and relevant public authorities/bodies

3) Require all equity stakeholders in PFI special purpose vehicles to abandon offshore tax havens and become domiciled in the UK

4) End the practice by PFI contractors of creating multi-tier workforces doing the same job on different rates of pay and with different terms and conditions and bring the workforce in house

5) Make blacklisting workers a ground for mandatory exclusion under regulation 57 of the Public Contract regulations

For further background:

National Audit Office - PFI and PF2
TUC - What lessons can we learn from Carillion?
The Smith Institute - Out of Contract: Time to move on with the 'love in' with outsourcing and PFI
J. and M. Cuthbert: Report commissioned by the Scottish Labour Party
BBC News - PFI: five firms avoid tax despite £2bn profits
The Independent - NHS cleaner strike