Leeds City Council has been carrying more PFI debt than nearly every other council in England, data released by HM Treasury shows. And the figure – currently standing at £2.2 billion – is set to rise even further when two new PFI contracts in the pipeline are signed off in the coming months.
The repayments currently being made by the council are running at nearly £75 million a year, and will carry on rising steadily every year till they peak at £95.6 million in 2030.
That’s without including what the city is going to have to pay over the next 25 years for its controversial new PFI incinerator at Cross Green. And before the 20-year costs of the long-delayed and increasingly expensive PFI housing project in three areas of the city are factored in.
As things stand, only Birmingham – with its £2.4bn PFI highways maintenance contract – and Lancashire will end up making greater repayments than Leeds.
Greatest number of PFI projects
During the last Labour government Leeds City Council took out PFI credits to pay for 11 projects covering school building, housing, street lighting, leisure and other services. Since the coalition came to power it has signed off one more – for a “Wellbeing” centre in Holt Park.
No other council in England has financed more than eight projects using PFI.
PFI uses private money for major public sector capital projects. The private company builds and owns the facility, which is then leased back to the state (in this case the local authority), in exchange for regular repayments. Those repayments typically include the running and maintenance costs associated with the project during its PFI lifetime.
Interesting to note that the UK arm of Veolia, which is going to deliver the controversial Leeds incinerator, posted a 20% profits hike today (10th July) as revenue from its private finance initiative (PFI) portfolio surged.
Here’s how the Leeds repayments pan out year by year (2001-38). The estimated cost of the two projects in the pipeline is not included.
And here’s the list of the total amount (in £million) each English council is paying back over the next 20-30 years for its PFI deals. Multi-council deals are not included.