Speaking after the First Minister Question Time, Mike Hedges
AM said…. ‘I welcome the First Minister’s reply to my question. PFI Contracts
are hugely wasteful of public money and I am pleased that the PFI contracts in
Wales will be reviewed and that the Welsh Government might consider supporting
ways to use the invest to save scheme to reduce their service payments. Some of
these schemes are incredibly expensive and the money could be better spent
elsewhere.’
Mike Hedges
AM - 5. Will the First Minister make a statement on PFI contracts with public
bodies in Wales that are funded by the Welsh Government? OAQ53277
First
Minister of Wales
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Llywydd,
there are 23 historic private finance initiative contracts with Welsh public
bodies currently operational in Wales. The annual service payment for these
schemes totals around £105 million. These schemes must be the subject of
regular review, and arrangements for that review will be set out shortly.69
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Mike Hedges
AM - This is an issue I've raised regularly with the First Minister when he was
Cabinet Secretary for Finance. I believe PFI schemes are expensive and a waste
of public money, and are taking money out of revenue. Will the First Minister
undertake a cost-benefit analysis for all of the schemes currently paid for by
Assembly-funded public bodies in Wales, and then consider using invest-to-save
to buy out those where it would be beneficial to do so, which I believe would
probably be most of them?70
First
Minister of Wales
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I thank
Mike Hedges for that question and for the regular advice that he has provided
on this matter—advice that, as he knows, is consistent with the approach that
successive Welsh Governments have taken since devolution. In Wales, citizens
pay about £40 per head each year as a result of PFI schemes, and that's about a
fifth of what citizens in other parts of the United Kingdom have to pay.71
I agree
with what Mike Hedges has said, Llywydd—that there should be a review of
historic PFI schemes. The Welsh Government will shortly be writing out to all
contracting authorities in Wales to make sure that that happens, and that it
happens every year. In the first instance, it is for those contracting
authorities to review the contracts and to see where there may be potential
scope to make savings on their annual service payments. In order to incentivise
that practice, the policy we will pursue will be that that authority will be
able to retain any savings that it generates in that way.72
In cases
where an authority is considering early termination of the contract, then there
will need to be a dialogue between that authority and the Welsh Government. We
may be able to look at measures such as our invest-to-save fund to assist them
in doing just that.
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