MPs: Labour wasted £1bn on PFI projects

ALISTAIR Darling, the former chancellor, wasted over £1bn by using the private finance initiative (PFI) to fund a series of vote-winning projects in the run up to the election, according to a report by an influential group of MPs.
The Public Accounts Committee found the taxpayer had to pay an extra £1bn for PFI deals financed during the crisis, after the credit crunch pushed up borrowing costs for infrastructure projects.

Jesse Norman, a Tory member of the committee, told City A.M.: “The government was determined to push through these projects because it wanted to have lots of good news stories in the run up to the election.

“But these deals were done at inflated prices.”

Norman added that a “rudimentary analysis” of the projects Darling signed off in this period showed a large number benefited voters living in Labour marginal constituencies, suggesting the government was trying to skew the result of the election.

The report also criticises the Treasury for failing to use its strong negotiating position – as a shareholder in RBS and Lloyds – to push down financing costs.