'Loopholes are hiding the true cost of PFI schemes in Wakefield'

Red tape is allowing billions of pounds of taxpayers’ cash to be spent without proper public scrutiny on costly deals to build hospitals and council buildings, academics have warned.

By James Carney
Thursday, 27th February 2020, 10:19 am
Updated Thursday, 27th February 2020, 10:20 am
Red tape is allowing billions of pounds of taxpayers cash to be spent without proper public scrutiny on costly deals to build hospitals and council buildings, academics have warned.
Red tape is allowing billions of pounds of taxpayers cash to be spent without proper public scrutiny on costly deals to build hospitals and council buildings, academics have warned.

Researchers from the University of Leeds have said hundreds of public bodies are using loopholes in Britain’s freedom of information system to hide the true cost of controversial private finance initiative deals.

The claim comes after JPIMedia Investigations revealed how legacy contracts had ballooned in cost, adding almost £5bn to the overall price tag of PFI schemes.

Politicians and academics are now calling for sweeping reforms to current FOI laws to lift the veil of secrecy.

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Researchers from the University of Leeds have said hundreds of public bodies are using loopholes in Britains freedom of information system to hide the true cost of controversial private finance initiative deals

Megan Waugh, a PhD researcher at Leeds who led the study, branded the current system as “not fit for purpose” and claimed she had “struggled to unlock important information” from NHS trusts, councils, police and fire authorities.

While the study’s co-author, Dr Stuart Hodkinson, added: “The profound difficulty in uncovering even the most basic information about PFI contracts shines a light on the current accountability vacuum for PFI schemes.

“Our findings show that currently the law is too weak to be effective and is being flagrantly ignored by public bodies.”

There are currently more than 700 PFI schemes operating nationally, with a combined capital value of £59bn and total contractual payments worth £309bn between 1990 and 2050.

In more than half the cases, authorities failed to respond within the statutory 20-day period exceeding the legal limit under FOI guidelines.

Between 2016 and 2017, researchers at Leeds submitted 687 FOI requests covering 678 of the 715 PFI projects nationally to 315 of the 331 public authorities involved.

However, in 42 per cent of requests no information whatsoever was provided, and only 24 per cent resulted in full disclosure.

In more than half the cases, authorities failed to respond within the statutory 20-day period – exceeding the legal limit under FOI guidelines.

Only five per cent of late responses provided a legal justification for doing so.

In many instances, researchers were unable to gain access to basic information like the number and local of buildings or sites across PFI schemes. The study also found an over reliance of non-exemptions as reasons for withholding information, such as legal exemptions or expense.

Andrew Slaughter, the Labour Hammersmith MP who has campaigned for better FOI laws, has now demanded the government ‘look seriously’ are overhauling the system.

He added: “This research makes the case for comprehensive reform of Freedom of Information legislation 20 years after the original Act was passed.”

PFI projects contracts have been signed by councils and health trusts across West Yorkshire and have more often than not become more expensive than they were originally projected.

Figures revealed at the end of last year showed the size of the bill.

A street lighting contract Wakefield that was due to cost £107.1 million and is currently running below its expected whole-life cost by £6.8 million.

A hospitals development project contracted by Mid Yorkshire Hospital NHS Trust, which runs Pinderfields, Dewsbury and Pontefract hospitals, was originally expected to cost £1,435 million. It is currently £223 million over its projected budget at £1,658 million.

A Wakefield Council semi-integrated waste management project was expected to cost £795 million and is currently at £793 million, a minus £1.8 million difference.

The Calderdale five schools project was expected to cost £191 million but currently stands at £200.9 million – a £9.5 million increase.

Calderdale and Huddersfield NHS Foundation Trust refused to provide data on the cost of a PFI contract for Calderdale Royal Hospital.

A Kirklees Council group schools project was expected to cost £418 million but is currently at £473 million, a £55 million increase.

The Kirklees Council special schools reorganisation was originally costed at £69 million but now stands at £70.6 million, an increase of £1.38 million. Kirklees waste management project was costed at £215.5 million but currently costs £245.9 million, an increase of £30.4 million.

And Kirklees Council’s excellent homes for life contract was originally costed at £197.2 million and has increased by £200,000.

A Government spokesman said: “The government is fully committed to transparency and this means we are now publishing more data than ever before.

"The existing rules already have detailed guidance which set out exactly what information is available under FOI, and all contractors must comply with requests by a public authority for access to such information, and do so in a timely manner.

“As announced in last year’s Budget, we will no longer be using PFI and PF2 for new government projects. We are supporting departments with PFI management, including providing guidance on the expiry of PFI contracts, and directly supporting contract managers through the Centre of Best Practice established in DHSC to support NHS Trusts.”