THE Private Finance Initiative (PFI) has to be the biggest con in history.

It was started around 1993 by John Major’s Conservative government, and it flourished uncontrollably under the subsequent Blair and Brown Labour government.

It funds public infrastructure projects by using private capital, meaning that mind-boggling sums have been left off the public balance sheet. These sums are to be re-paid, often over 25 years, so are quite simply a debt. These debts are not reflected within the National Debt and so have therefore been kept out of the public eye.

For an instance, from a recent Freedom of Information I made to the South Tees Foundation Trust, I learned that in 1999 the then South Cleveland Hospital was to be rebuilt and the PFI contract started in August 2003 when the hospital moved to its new site. The amount borrowed was £151,311,000. Paying this debt back (excluding VAT) at £55m-a-year, the total repaid for the £151m hospital is £985m.

Six hospitals could have been built at South Tees for the price they will pay for one.

I could go on: St James’ Hospital in Leeds cost £265.2m to build, repaid over 25 years the total cost will be £945.9m – a 356.7 per cent profit to the moneylenders. Payday loans are cheap compared to this.

These PFI contracts are not limited to hospitals –police stations, fire stations, railway stations, schools and the ministry of defence are involved.

The most expensive PFI contract is the MoD’s Future Strategic Tanker Aircraft which has a capital cost of £2.7bn and by the end of the contract in 2034-35 will have cost £105bn.

Amyas Morse, the head of the National Audit Office, said on June 17, 2010, that the NHS hospitals which are under a PFI contract are making the repayments on time but they will have to make cost cuts to maintain the debt and ensure the payments are kept up to date. He said that they will need to keep cutting costs to maintain these enormous debts for some years to come.

The total debt owing on 719 projects is a staggering £301,343,154,097. Local authorities and NHS trusts, the MoD and others have entered into arrangements which are beyond normal comprehension.

Stephen Place, chairman, Ukip Richmond (Yorks)