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Labour’s return to casino economics risks creating a financial time-bomb for Wales

21/06/2022

A return to discredited private finance initiatives (PFI) would be a ticking time-bomb for the Welsh economy according to a Plaid Cymru AM.  Leanne Wood AM said she was astonished that when questioned on the matter, by her colleague Rhodri Glyn Thomas AM, Labour government Ministers refused to rule out privatising education and transport schemes.

The South Central Assembly Member has now written to the First Minister demanding to know if PFI schemes will be used in future.  Ms Wood said that while the government needs to look at tackling the funding gap left by Tory-Lib Dem Westminster cut backs, to saddle future Welsh generations with excessive debt would be foolish, especially at a time when the Welsh economy is still fragile.

Leanne Wood AM said:

"I have written to the Minister for Education, the Local Government Minister and the First Minister to ask them to confirm or deny if they are planning to re-introduce PFI deals across government departments.

"It would be astonishing that after accepting that PFI is not a good use of public money as part of the One Wales government, Labour would ignore that and go back to adopting a discredited way of financing projects.  It would be even more shocking, after promising to be a shield against Tory cuts, for Carwyn Jones’ government to follow such a right wing Tory agenda – and hand out vast amounts of public money to private companies. 

"PFI is recognised as being poor value for money.  This type of deal has by now been totally discredited and I would be appalled if the new Labour administration in Cardiff would be prepared to saddle Wales with huge repayment debts that would be a ticking financial time-bomb for Wales."

Ms Wood was joined in criticism of the Welsh government’s support by, Simon Thomas who added:

"The Tories and Lib Dems have inflicted savage cuts on the Welsh economy that have hit capital budgets the hardest.  We obviously do need to look at new ways of investment but such short term naivety would be devastating in the long term.

"Plaid Cymru has put forward a credible alternative to PFI in our not-for-profit Build4Wales proposal that would invest in schools, roads and hospitals at the same time as creating up to 50,000 jobs.  This would be a far more realistic approach than crippling the NHS, schools and local authorities with years of excessive debt that would eventually have a damaging impact on front line services.  Labour has rejected Plaid’s innovative approach – but to return to the expensive and discredited PFI deals would be a huge mistake."

ENDS / DIWEDD

Notes:

Rhodri Glyn Thomas AM’s questioning of Education Minister Leighton Andrews:

Rhodri Glyn Thomas: 

Minister, you rightly told Darren Millar that it was the coalition Government’s decision to cut capital finance for Wales, which will mean that new schools will not be built and schools will not be renewed. That is the reality, and the responsibility for it lies with the Conservative and Liberal Democrat parties in coalition in London. However, in an earlier answer to me, you referred to alternative funding. Are you telling us that the Labour Government is looking at private finance initiative funding for new schools in Wales?

Leighton Andrews:

I have always been open to looking at alternative sources of capital.

Rhodri Glyn Thomas AM’s questioning of the Local Government Minister:

Rhodri Glyn Thomas:

I am not sure whether you heard the Minister for education on the Government’s future plans following the Westminster coalition Government’s cut of 41 per cent to the capital budget, saying that he is considering PFI as a way of funding future capital schemes. Do you agree with your ministerial colleague that that is the way forward for Wales and that we now have to consider using PFI schemes?

Carl Sargeant: 

I thank the Member again for his question. We must ensure that we have good quality public transport. We have a great opportunity to focus on the way in which we do business in Wales, but regrettably, with such a difficult settlement from the UK Government in terms of the capital spend, the transport budget last year received an extremely large cut, and I must deal with that in taking this portfolio forward for the future.