Just £32 million withheld from PFI providers

A new freedom of information request has revealed that just £32 million was withheld from PFI providers, confirming government fears that tax payers are over-paying for poor service.

Following Chancellor Philip Hammond’s announcement that PFI contracts do not deliver value for taxpayers in his Budget statement, law firm Collyer Bristow reveals that £14 million of the £32 million being withheld is held back from just one local authority, Birmingham City Council, who have a long running dispute with Amey over maintenance of the Birmingham road network.

Brighton & Hove City Council has also had issues with its £1 billion PFI contract with Veolia, an environmental services company. The council has criticised Veolia for the council’s low recycling rate of 27 per cent, as they refuse to recycle certain materials.

Catrin Rees, a Senior Associate in Collyer Bristow’s Construction team said: “The amount of money withheld by local councils was just £24 million in 2016 - just 0.3 per cent of the £10.3 billion of annual payments to all PFI providers across the public sector. Councils are often reluctant to withhold payment as they are concerned about the legal implications of doing so. However, PFI contracts will invariably have some sort of contractual mechanism to allow payments to be reduced for failures in performance. Councils and ultimately taxpayers should not be paying for services if they are not being delivered by PFI contractors.”