The funding agreements for ‘lax’ PFI waste projects have been criticised in a report from the spending watchdog.
A report from Public Accounts Committee (PAC) found that ‘poorly drafted’ contracts signed by the old Department for Environment, Transport and the Regions meant three councils were given millions in grants even though facilities have yet to be built.
It revealed that councils had received £213.5 in grants from Government over the past 15 years with no main waste assets to show for the funding.
Margaret Hodge MP, chair of the Committee of Public Accounts, said: ‘It is appalling that lax, poorly drafted PFI funding agreements to support the building of local authority waste processing plants have led to hundreds of millions of pounds worth of grants being made to three councils even though the main waste assets – such as incinerators – have not yet been built.’
It calls on Defra to ensure they only pay for what is delivered in the future and act with urgency if it has concerns over a project’s progress. It also recommends it works with local authorities to improve their contracting capability and help them negotiate better value PFI contracts.
Ms Hodge added: ‘Long PFI contracts that typically last 25-30 years may be inappropriate for the waste sector where technology is continually evolving and the amount of waste that will be produced in the future could be hard to predict.
‘The Department has more work to do to improve local authorities’ contracting capability, especially for PFI projects, and ensure that they only pay for what is delivered in future without getting locked into long, inflexible contracts.’