A February 2018 study by the Centre for Health and the Public Interest has revealed that PFI firms will earn £4.8bn from schools by 2020, reports the Guardian. This diversion of taxpayer money to private companies via schools — the procurement form of corporate welfare — will give those holding contracts roughly £270m in profits.
While the government allocated £1.3bn in additional funds to schools in 2017, the study shows that 1 in every 4 pounds will be paid as profit to PFI firms. Further, the study found that taxpayers will pour £32bn into PFI contracts with schools over the lifetime of these contracts.
MPs critical of this arrangement have proposed a ‘windfall’ tax on PFI firms to combat what they believe are windfall bonus profits, resulting from the reduction in corporation tax from 30 percent when most contracts were signed to 19 percent today (due to drop further to 17 percent by 2020).
Of the high-cost of PFI contracts, Kevin Courtney, joint general secretary of the National Education Union, said,
The collapse of Carillion has brought into sharp focus the toxic legacy of PFI. PFI-related cost is a major problem for many schools, with the expense of PFI compounded by eye-watering charges made by PFI companies to maintain schools.
Meanwhile, teachers in some districts are paying for classroom supplies out of their own pockets because of a lack of funding provided by the government.
Looking at the big picture of PFI, the National Audit Office concluded that these contracts will cost UK taxpayers £200bn over 25 years. In some cases, it found that PFI projects cost 40 percent more than would a publicly financed and managed project.