A major report commissioned by Britains chartered accountants warns that their countrys equivalent of P3s, known as private finance initiatives (PFI), will mean higher taxes or service cuts.
The Association of Chartered Certified Accountants has condemned Britains PFIs in a new report examining 21 road and hospital projects. The report concludes PFIs arent accountable or transparent, and that their true costs are hidden in convoluted and obscure accounting practices. The report finds PFIs an expensive way of financing and delivering public services that may, where public expenditure is constrained, lead to cuts in public services and/or tax rises.
The group says PFIs siphon money from the public to corporations: the chief beneficiaries are the providers of finance leading to a redistribution not from the rich to the poor but from the mass of the population to the financial elite. While risk transfer is a main argument in favour of PFIs, it rarely happens. Instead, risk has remained with the public partner, creating new costs and blurring accountability.
The report is sharply critical of the schemes for many reasons, including access to information. The researchers found that more information is made available both by the companies and the Government to the capital markets than to the public at large. Visit http://www.accaglobal.com/research/summaries/2270443 to find out more.