SNP says PFI bill 'up by £27bn'

PFI projects have been criticised in the past for being inefficient and costly

The Scottish National Party (SNP) has accused the UK Government of hiding the cost of Public Financial Initiative (PFI) contracts.

It claims these schemes will now cost £27bn more during the period to 2032 than stated in the March 2008 Budget.

A Treasury spokesman said that the figures were a "gross inflation" of the actual cost to government as they had not been adjusted for inflation.

PFI deals use private sector money to fund public sector projects.

Such contracts are often entered into to fund, build and operate assets such as hospitals or schools.

'Out of control'

SNP Treasury spokesman Stewart Hosie said that in the chancellor's March 2008 Budget, the expected bill for PFI contracts until 2032 was £188.6bn.

But new figures published in the pre-Budget report last week showed that this had gone up to £216.1bn.

"We have always known that PFI was hyper-sensitive, but it is clear that the liability is rocketing out of control," Mr Hosie said.

Describing the initiative as a "millstone around the UK's neck", he said that this would compound already stretched national debt if the government had to put the costs onto its own books.

But a Treasury spokesman said: "These figures grossly inflate the actual cost of PFI projects to the government, as they have not been adjusted to reflect inflation.

"PFI has delivered good value for money, improved services and it will continue to play a small but important part in overall procurement of public services."