In a report just released MP’s have demanded that the government should add an extra £35 billion of debts to its books accrued from private finance initiative (PFI) projects. Adding this figure will build a much more complete picture of how far the United Kingdom is in the negative.
Tax payer can be saved £400 million a year
Andrew Tyrie, Conservative committee chairman has said: “PFI means getting something now and paying later. Any Whitehall department could be excused for becoming addicted to that.”
The UK government is being called on to renegotiate contracts. MP’s are of the understanding that by taking this approach the tax payer can be saved £400 million a year.
The use of PFI projects has been negatively viewed by the Members of the Teasury select committee. These projects have dominated public building projects for the last 15 years and the reason the use of PFI projects has been frowned upon is because they are viewed as an ‘extremely inefficient’ technique of financing projects.
Adding the debts from the PFI projects will mean that Britain’s debt will increase by 2.5%, and this is at the same time when other countries around the world are starring at their very important credit ratings being downgraded simply because of their problems with balancing books.
“We must first acknowledge we’ve got a problem”
Mr Tyrie talking about the direction forward has said: “We can’t carry on as we are, expecting the next generation of taxpayers to pick up the tab. We must first acknowledge we’ve got a problem. This will be tough in the short term but it should benefit the economy and public finances in the longer term. PFI should be brought on to the balance sheet.”
The Chancellor of the Exchequer has come back by saying that the government understood what the report had revealed and was working on getting the debt put on the balance sheet and more importantly was working out how to save money.