Private finance challenge for new Labour leader

Plaid Cymru’s North Wales AM has challenged Welsh First Minister Mark Drakeford to review the cost of a Private Finance Initiative waste scheme in Wrexham with a view to buying out the contract.

Llyr Gruffydd said: “The waste contract between Wrexham Council and a private firm called FCC isn’t due to expire until 2038. The council already pays more than £15 million a year for the contract and this is increasing year on year at a time when the council’s funds are decreasing.

“Mark Drakeford, in his manifesto to become the Labour leader, pledged to ‘review existing PFI contracts across the Welsh public sector, to buy out those contracts where that provides a better outcome for the public purse’.

“One of the key PFI contracts in Wales is the Wrexham waste scheme. It will cost at least £419 million over its lifetime, a sum that has risen significantly over the years. Wrexham’s 2017-8 statement of accounts revealed an additional £900,000 cost to the council because the market in recyclates had slumped. It’s clear that the company gets the benefit of a long-term contract worth hundreds of millions of pounds with none of the risk.

“With this in mind, I’m asking the First Minister to look at this contract with some urgency. The Welsh Government supported the initial contract with £40 million of funding. If it can reduce the council’s outgoings at a time when frontline services are being cut each year, then it would be a clear benefit to residents in Wrexham.”

PFI schemes, where private companies provided public services, were widely promoted by both Labour and Tory governments in the 1980s and 1990s before being discredited due to the huge long-term costs for councils and the NHS.

Mark Drakeford’s pledge can be found here: “Institute an annual review of existing PFI contracts across the Welsh public sector, to buy out those contracts where that provides a better outcome for the public purse.”

Background to Wrexham PFI scheme and its escalating cost.

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