Tories pledge to put PFIs on balance sheet

A Conservative government would be transparent in public finances and place controversial private finance initiatives on its balance sheet, the Tories plegded today.

The comment follows an Accountancy Age story, which revealed that the government would gloss over £32bn in PFI debt through the use of softer accounting rules.

Shadow chief secretary to the Treasury, Philip Hammond accused the government of misleading the public.

"Only a day after we discovered that the Prime Minister misled the country about his plans for spending cuts, we find out the government is trying to hide £32bn of debt off the balance sheet,” he said.

“Yet again, Labour is taking the public for fools. If they can't be straight about the scale of the problem, how will they ever solve Britain's debt crisis?”

The Conservatives have promised to end such practice and place PFI liabiliites on the balance sheet

Currently, the government plans on using international accounting standards for its internal reporting but softer national rules for its external reporting.

Controversially, national account rules will not take into account PFI arrangments which, it has been estimated, will leave £32bn pounds off the public balance sheet.
The government will also be using softer national standards to underpin borrowings.

The £32bn estimate is based on a report co-authored by former Treasury adviser David Heald, who analysed 2007 numberrs to arrive at the figure.

The government says it has no choice but to use UK rules for for its public reports. Heald disagrees.

Further reading

Darling's £32bn ruse