Critics attack PFI ‘offshoring’

PFI opponents have opened up another line of attack against the model, after a thinktank highlighted five companies that are based offshore and have therefore paid little tax.

The European Services Strategy Unit (ESSU) pointed out that 12 offshore companies have bought equity in 74% of 735 PFI deals, while details of five companies – HICL; John Laing Infrastructure Fund; 3i Infrastructure; International Public Partnerships; and Bilfinger Berger Global Infrastructure – showed that little tax was paid on their overall pre-tax profits.

Meg Hillier, chair of the Commons public accounts committee, attacked the figures on the BBC's The World Tonight, describing it as “shocking”.

She added: “I don't think that was ever envisaged when PFI was established."

However, HICL responded to the criticisms, pointing out that ESSU’s research took no account of the fact that tax was paid both by the company’s subsidiaries and by shareholders on their dividends.