David Taylor, a CIPFA associate, said PFI did not bring in extra cash for public investment and did not save money. The MP for North-West Leicestershire expressed ‘dismay and astonishment’ at his own government’s readiness to back projects using a rationale that was ‘shot through with subjectivity and based on figures of doubtful authenticity’.
He said claims that PFI levered in extra investment from the private sector were ‘financial illiteracy raised to an art form’ and that every penny raised for projects was ‘paid for by the public purse, plus interest, plus profits’.
In a special debate he called ‘Myths, Sorcery and Other Accounting Devices’, he continued: ‘PFI does not lever in private finance. It merely allows private shareholders to dip their ladles into an increasing stream of tax revenue.’
Taylor said independent research showed chancellor Gordon Brown could have paid for the whole PFI programme from the Treasury without breaching his ‘golden fiscal rules’.
On the issue of risk, Taylor said: ‘At this point we enter the seedy world of accountancy massage parlours where figures are pummelled and distorted into unrealistic shapes.’
‘PFI is prohibitive in cost, flawed in concept and intolerable in consequences for the taxpayers, citizens and workers who put us in the House of Commons and look to us to defend their interests,’ he added.
But financial secretary to the Treasury, Paul Boateng, said PFI could bring in more investment, provide better value for money and improve the quality of public service procurement.
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