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DispatchesUndercover Mosque title

PFI title

Broadcast: Monday 14 August 2006 08:00 PM

Liam Halligan reveals how the private funding of state schools and hospitals is draining hundreds of millions of pounds from frontline services, while creating a £4 billion-a-year industry and a new elite of PFI professionals.

Public Service, Private Profit


Channel 4 News Economics Correspondent Liam Halligan tackles the controversial Private Finance Initiative.

He reveals how the private funding of state schools and hospitals is draining hundreds of millions of pounds from frontline services, while creating a £4 billion-a-year industry and a new elite of publicly-unaccountable PFI professionals.

Under PFI, companies raise cash to fund public infrastructure projects, with the state signing long-term contracts. When it comes to 'delivering' schools and hospitals, New Labour claims PFI is 'the only game in town'. It certainly looks a win-win policy for Chancellor Gordon Brown. He can claim to be 'prudent' - because most PFI borrowing is off the government's books. And ministers can regularly be seen opening shiny new public buildings.

During a 6-month investigation, Halligan visits some of the UK's 700 PFI projects. He secures exclusive testimony - with numerous public officials speaking out for the first time - about 'hidden costs' and 'sweated contracts'.

And the film reveals Sir John Bourn, the Auditor General's, concerns about PFI. 'Dispatches: Public Service, Private Profit' reveals how the ownership of the HQ of a leading government department has been quietly transferred, by one of the UK's biggest banks, to an overseas tax haven. It reveals how a little-known investment company is now the biggest owner of UK schools and hospitals after the state - responsible for 100,000 pupils and 13,000 hospital beds.

The film also reveals how PFI locks us into 30-year contracts with companies then charging huge mark-ups for basic maintenance. Changing a light switch in one flagship PFI hospital costs hundreds of pounds. Halligan meets an exasperated Head Teacher, constantly battling to get a PFI company to honour its contract. "PFI has made students depressed at times - when they've seen the lack of interest in the building and poor quality of work. Staff have resigned over it. PFI is threatening this school".

Dispatches then unveils a multi-billion pound market in which public sector projects are being traded as commodities in the City of London. This 'secondary market' is generating huge profits. Since 1997, New Labour has signed PFI deals worth £43 billion - leaving taxpayers with a £150 billion bill over 25 years. And, in his last budget, Brown announced another £26 billion of new PFI projects.

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