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Mayor Joe and the big PFI question

Zak Garner-Purkis

The first question from the presenter caught me off guard.

“What is a PFI contract?” BBC Radio Merseyside’s Tony Snell asked.

I had been booked by the breakfast show to provide a construction perspective on the whole Carillion Royal Liverpool Hospital debacle, but I had now found myself tasked with explaining a complicated economic funding instrument.

“It’s kind of like a mortgage,” I said, “except other financial bodies can buy a stake.”

Mr Snell seemed to accept this pretty superficial explanation, which considering the mainstream audience was probably fair enough.

I wonder if Liverpool mayor Joe Anderson was listening to his local station ahead of appearing at the Labour conference in his hometown.

Because a few hours later the mayor was offering a very different explanation of PFI contracts, telling party delegates they were essentially “Wonga for the public sector”.

Mr Anderson has been a regular critic of PFI deals since he became Liverpool’s first mayor in 2012.

One of the big bugbears among PFI critics is the idea that private firms are lining their pockets with public money and reaping vast profits.

A quick glance at the latest CN100 shows that contractor margins are very much at odds with Mr Anderson’s description of a sector led by “rip-off merchants”.

It could be pointed out that three of Carillion’s biggest problem jobs that contributed to its downfall were PFIs. The risks cut both ways.

But for Mr Anderson to cast himself as some sort of anti-PFI warrior is something of a stretch.

Indeed, a project close to Mr Anderson’s heart suggests he remains open to complex deals between public bodies and private institutions to fund major schemes.

His plans to loan Everton Football Club £280m to build its new ground are an example of exactly that.

The deal will involve the council taking a stake in the stadium project by agreeing an intricate arrangement with the club along with several financial institutions.

Mr Anderson argued that it was a sound investment and would provide the council with an annual dividend of £7m a year, along with business rates of £1.4m.

“When you take the politics out of it, it is the right thing to do,” he told the Liverpool Echo when quizzed about whether the plans were an appropriate use of public funds.

My question for the mayor would be: is the Everton deal really that far removed from a PFI?

He wants to loan £280m of taxpayers’ money to help build a project being driven by a £171m-turnover private business owned by a Monaco-based billionaire.

So maybe the answer to “what is a PFI contract?” is in fact “whatever you want it to be”.

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