One-third of civil service offices built under PFI, figures reveal
Government Property Unit releases numbers as Labour announces policy to nationalise private finance initiative contracts
The Department for Work and Pensions has by far the biggest proportion of PFI-managed property holdings. Credit: John Stillwell/PA
Cabinet Office minister Caroline Nokes has revealed that 30% of civil service office space is managed by private finance initiatives (PFIs), following an announcement by the Labour party of plans to nationalise all PFI contracts if it wins the next election.
In a parliamentary answer to Labour shadow Cabinet Office minister Jon Trickett, Nokes released data on the proportion of the government estate in 2015-16 that was leasehold (56%), freehold (13%) and PFI-managed (30%). 1% of office space had a tenure marked as “other”.
This portfolio is monitored by the Government Property Unit, which helps departments make savings on buildings and has overseen around a 25% cut in the government estate since it was established in 2010.
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Under PFI, private companies are contracted to build, finance and manage major public projects and are repaid by taxpayers over the term of the contract.
Of the central government ministries, the Department for Work and Pensions has by far the biggest proportion of PFI-managed property holdings, according to figures found in the GPU State of the Estate report for 2015-16.
More than 1.5 million square metres of DWP office space is held under PFIs, compared with less than 22,000 square metres leased and less than 29,000 under freehold.
HM Revenue and Customs has just under 860,000 square metres of PFI-managed office space, while the Home Office, Ministry of Defence and Ministry of Justice each have over 50,000 square metres in PFI holdings.
DWP and HMRC both made 2% reductions to the total area they have in PFI holdings in 2015, the report said.
Announcing the policy this week to bring PFIs into public ownership, shadow chancellor John McDonnell said nearly £200bn is scheduled to be paid out of public sector budgets in PFI deals over the next few decades.
He said he wanted to end the “scandal” of private firms making huge profits on the back of deals to build public infrastructure.
Jon Trickett, the shadow minister for the Cabinet Office who asked the parliamentary question, told Civil Service World: "PFI has been an expensive failure. It has not delivered for the taxpayer and has only sought to line the pockets of big corporations.
"A Labour government will end the scandal of PFIs and bring them back in house."
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