£230bn PFI bill may hit jobs, warns GMB

The GMB union warned on Sunday that the recently revealed £65 billion private finance initiative (PFI) bill for NHS buildings was just a fraction of the total cost of projects which taxpayers will have to pay for in years to come.

National officer Brian Strutton said the cost of more than 650 PFI projects had now hit £230 billion and will not be fully paid off until 2048.

After anaylsing Treasury data he concluded that the debt "iceberg" would snowball as private contractors demanded above-inflation returns, with the PFI debt now equivalent to £9,300 per taxpayer.

Mr Strutton added that, including the £44 billion already handed over for PFI schemes up to 2009-10, the taxpayer would be hit with a total bill of more than £270 - almost five times the value of the assets built.

"This research shows what a terrible deal PFI is for the taxpayer. Rising debt levels are forcing hard-hit public agencies to cut services to save money.

"Exorbitant costs are creating a future PFI funding black hole of £230 billion, on top of the £44 billion already paid, that many hospital trusts and other public bodies are already finding impossible to fill."

Figures obtained by the BBC last week revealed that 103 PFI hospitals, which were valued at £11.3bn when they were being built, would now cost the public purse an estimated £65 billion over the next 30 years.

Some NHS trusts were left with annual "mortgage" repayments accounting for more than 10 per cent of their turnover.

Pressure group Health Emergency warned that the sum could "bankrupt the NHS," while public-sector union Unison highlighted that other public-sector services were also saddled with huge PFI debts that could trigger futher cuts.

Unison general secretary Dave Prentis said at the time: "PFI is not just a matter for hospitals. Many schools, libraries and prisons are also caught up in the dilemma of servicing expensive contracts at the same time as their budgets are being cut.

"PFI costs will increase the pressure to cut services in order to save money."