The Private Finance Initiative (or Public Private Partnership) is, quite possibly, one of the most idiotic policies for public spending ever designed. Worst Tory policy ever, and shocking that Labour continued - and expanded it - frankly. Now I'm no economist, but even I can tell a bad deal when I see one. Take for example, the A19 Dishforth to Tyne Tunnel - no I hadn't heard of it either until today.
The PFI contract was awarded in 1996 to Autolink Concessionaries Ltd, a consortium of three companies comprising of Amey, Sir Robert McAlpine and Taylor Woodrow. The road opened to traffic in 1998 and had a construction cost of £29.4m. The PFI Contract for Autolink continues until 2027.
Here comes the kicker. In 2005-06 alone, the taxpayer paid out on that PFI contract a sum of £24.4m. That's £5m short of the contruction cost in just one year of a contract that's been running for 11 years and has 20 years to go.
Sure, the people in the North-East got a road tunnel which I have no doubt is an absolutely vital and well used road link. But can it really be considered value for money at the rate that the taxpayer is paying Autolink for having built it?
The end game is that this road will actually cost the taxpayer an order of magnitude more than its actual construction cost by the time the contract ends, and this road is by no means alone. Over £200m was paid out in 2005/06 on PFI road contracts for just over 10 road projects, all of which have at least another ten years to run on them.