Alistair Darling, shadow chief secretary to the Treasury, also pledged that Labour would make sure that the private sector was paid only for risk that was genuinely transferred out of the public sector when awarding projects.
Speaking yesterday at the annual conference of the Private Finance Panel, Mr Darling warned that the public would lose faith in the PFI if it came to be seen as an ingenious way of circumventing spending controls at the taxpayers' expense. By getting the private sector to put up capital expenditure for road, rail and health projects and then paying it back through a stream of revenue payments in future years, the Government was creating formidable commitments for future generations which it was failing to monitor in a systematic way.
"The Government must put in place such controls immediately. If they don't we will," he said. "We cannot allow this country to sign up for commitments that it cannot reasonably afford. There have to be proper controls in place."
Mr Darling also said that, while Labour strongly supported the PFI, there would be much greater emphasis on making it a genuine partnership between the public and private sector: "It is not just about commissioning investment projects: it is about procuring services."
Earlier, the Chancellor, Kenneth Clarke,rejected Labour's criticisms of the initiative, saying it was leading to a "revolution in the provision of public services" with pounds 7bn of deals so far done. He dismissed suggestions that the PFI amounted to a "buy now, pay later" mechanism for funding public projects and defended the Government's target of signing pounds 13bn worth of PFI projects by the end of 1998-99.
He also unveiled new guidelines on how investors could trade stakes in PFI projects.
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