UNIONS and MPs have called on the Government to scrap Private Finance Initiatives (PFI) as a way of financing public building projects.

A Public Accounts Committee (PAC) report branded PFI deals better for the private sector than the public sector.

Several high-profile schemes, including major hospital and school improvements, have gone ahead in East Lancashire through PFI.

The report highlighted the heavy ongoing financial burden they place on public organisations and criticised the ‘bumper profits’ made by PFI investors.

East Lancashire Hosp-itals NHS Trust is tied into a 38-year contract with PFI firm Consort Healthcare, which built the £113million Royal Blackburn Hospital extension, and Catalyst Healthcare, which built the £30million Phase 5 extension at Burnley General Hospital.

Interest repayments for the two projects will amount to an estimated £1billion.

Jonathan Wood, the trust’s director of finance, said: “We have very good buildings as a result of PFI schemes, with facilities purpose-built for the provision of modern health-care.

Sensible use of PFI options within our trust has supported big improvements in operational efficiency.”

Blackburn with Darwen Council’s Building School for the Future programme is underway with contractors Balfour Beatty.

The first school, Pleckgate High, is set to open this month.

Coun Maureen Bateson, executive member for children’s services, said: “As a whole, PFI schemes haven’t always delivered the best value for money.

“But we are confident that more recent schemes, including our BSF programme, have learnt from this.”

Dave Prentis, Unison general secretary, said PFI deals were bad for the taxpayer.

He said: “As budgets get squeezed, every pound possible should be going towards keeping services running, not topping up investors’ lucrative off-shore accounts.”