COUNCILS BECOME PFI INVESTORS
The great debate about the use of private money to fund public projects with the emphasis on the benefits for the private investor and the poor deal for the taxpayer, has now entered a new phase as local councils take on the Public Finance Initiative investor role. Recent months have seen a spate of local authorities financing and building state of the art health facilities for other public bodies to pay back over the long term. Councils up and down the country are now investigating how they could replicate these new PFI projects across England.
The projects nearing completion include Huntingdonshire District Council with a new state of the art 6.5million pound health centre which the PCT will rent back from the Council. Wychavon District Council is building a 6.7million pound hospital and health centre. The 26 bed hospital and GP surgery with 13 doctors will be completed late September.
The council funded Public Finance Initiatives are concerned with helping to ensure that local people get the right services, whichever part of the public sector they come from. The principles which guide councils in making this type of investment are that it has to be a regeneration project from the town, it has to have community benefit and it has to be reinvested locally.
Chairman of the Local Government Association, Lord Bruce Lockhart, said:- “Local Authorities are leading the way in looking at entirely new ways to fund and build projects that are beneficial to the local community even if they don’t come strictly under the remit of the Council. Not only do the community benefit from new facilities, but it’s makes financial sense for the councils as it provides them with an income stream helping to keep council tax as low as possible. Taxpayers’ money is being spent in a highly unusual, but ultimately bold way, to improve local services and to deliver key improvements in the infrastructure of local areas.”