Multi-million bill for PFI projects in Leeds

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Charges for high-profile Private Finance Initiative schemes in Leeds will cost taxpayers £83m this year, the latest figures reveal.

The payouts are forecast to rise to £96m by 2029-30, with the money coming from government grants and the council.

Leeds City Council has been at the forefront of using the PFI funding system to provide new schools and other facilities.

Under a local authority PFI contract – typically lasting 25 years – private companies build and maintain the facilities in return for annual payments made over the lifetime of the contract.

At the end of the 25 years, ownership passes to the council. Critics argue it is a more expensive way of funding public schemes, while supporters point out costs are fixed and contracts can include a range of other benefits.

There are 10 PFI projects in Leeds that have provided 40 new or fully refurbished schools, new homes and housing improvements, replacement of street lighting, new homes for people with learning difficulties and mental health needs, two new leisure centres and centres providing both council and health services.

Another PFI scheme – the Holt Park Well Being Centre, which will include social care, leisure and community facilities in one building, is under construction. Two more are in the pipeline, a £139m electricity-generating incinerator at Cross Green and the Little London and Beeston Hill and Holbeck housing project.

While the capital investment of the 13 schemes totals nearly £1 billion, charges to be paid out of the public purse over the period covered by the contracts add up to over £2 billion.

Coun Keith Wakefield, council leader, said he shared the concerns some people had over the long-term funding arrangements surrounding PFI but he added: “If you wanted to put right years of neglect in schools, sports centres, housing and infrastructure, you had to do it. No-one had another plan, so people can sit on the sidelines and boo and jeer but in the end I would rather have the investment.”

PFI projects carried out include Pudsey Grangefield, Lawnswood, Allerton Grange, Carr Manor and John Smeaton high schools and Armley and Morley lesiure centres.

Cori Braham.

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