Sport and Youth Crime

Debate between Stella Creasy and Thérèse Coffey

Tuesday 6th December 2011 Westminster Hall

[Stella Creasy]

The hon. Lady ought to listen to her colleague, the hon. Member for Folkestone and Hythe, who talked about priorities. In a time of financial austerity, the national citizen service is a very expensive scheme for a very small amount of time. If we are not able to fund everything—yet we are all in this together—we have to look at what money is being spent on young people. I advise the hon. Lady to look at the Government’s commitment to fund the national citizen service for all 16-year-olds and the amount of money that that implies. She has made a powerful case about value for money and the cost of some of the alternative schemes that support young people, but perhaps she should consider which is the greater priority at this point in time. I have a background in working with a national scheme that provides exactly that sort of citizen service through the uniformed organisations. No one is suggesting that such schemes do not have merit, but in a time of financial austerity, it is absolutely right to ask about the Government’s priorities, especially given the powerful case that Conservative Members have made about the impact of sports provision and the importance of working with voluntary organisations and providing services not just for eight weeks in the summer but throughout a young person’s life, so that they can have mentoring and support, not just to avoid antisocial behaviour, but to secure achievement.

[Dr Thérèse Coffey]

The hon. Lady suggests that the systems that we have had seem to have worked. It is fair to say that this new initiative is a seedcorn project, but I think that it has great potential. We should not keep throwing money at projects that may not have had the impact that the hon. Lady suggested.

[Stella Creasy]

I absolutely agree with the hon. Lady, and I therefore advise her to read the Education Committee’s report on the national citizen service in which questions were raised about the scheme’s value for money and efficacy. That is the key point. If we all agree that sport makes a difference to young people’s achievement, we have to look at how we can use the resources that we do have to make sure that we get results. I will end on that point. The Minister needs to champion the work that we all agree is important and he needs to champion the resourcing, otherwise many young people will not have access to the opportunities that we all agree make such a difference, and we all recognise that Britain would be poorer for it.

Private Finance Initiative

Debate between Stella Creasy and Thérèse Coffey

Thursday 23rd June 2011 Westminster Hall

[Stella Creasy]

One of the genuine delights about serving on the Public Accounts Committee with the hon. Gentleman is that he has such a wealth of knowledge and anecdotes that clearly illustrate the challenges that we are dealing with. He took part in the Committee’s session, so he will know that I have grave concerns that moving assets overseas to offshore tax havens has substantial consequences for our assessment of the value for money of PFIs. When the decision to go for a PFI project is taken, an assessment is made of the tax that we will get in return, but there is widespread evidence that many companies then move their assets overseas to offshore tax havens. In fact, the Treasury Committee took evidence showing that 91 PFI projects were owned by secondary market infrastructure funds, so we are losing money. One of the best examples of that problem is a body set up by HSBC. The HSBC Infrastructure Company Ltd, which manages a number of hospitals in this country, has made £38 million in profit from 33 PFI schemes, but it has paid just £100,000 in tax in the UK in the past six months.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Just to clarify, is the hon. Lady suggesting that, as part of the negotiation of a PFI contract for, say, an NHS hospital, a calculation is done on the basis of what corporation tax would be paid? Were NHS trusts doing that? I am a bit surprised to hear that.

[Stella Creasy]

No, let me be clear. The Treasury uses the Green Book to assess whether a PFI is an appropriate model. An assessment is made specifically of the Exchequer’s tax take over the life of the contract. It is precisely because that is part of the value-for-money assessment that I have great concerns about the fact that we are not getting the tax we expected, which would make the PFI a reasonable model to use.

It is therefore fair to ask what we can do. If the Government are proceeding with the PFI—that is an interesting issue for Government Back Benchers who are concerned about this issue—what action are they taking to learn from the way in which previous contracts were negotiated? One thing that is clear to those of us on the PAC is that there is a better understanding of the skills needed to negotiate these contracts. The hon. Member for South Norfolk was clear about the skills needed in the public sector to negotiate with the private sector and to improve the way in which contracts are negotiated. We must also appreciate that we in the public sector have tried to renegotiate contracts after the fact by asking for increased provision in our hospitals, for example, or by looking at different services. That, of course, has consequences for the response from the private sector.

The fundamental question as regards continuing with the PFI—the Government certainly seem content to do so—is what action Ministers are taking on tax and tax havens. The hon. Member for Hereford and South Herefordshire is right that we need better data on tax assessments, and those of us on the PAC were certainly unable to get information about assessments of the tax that various PFI projects were expected to generate when they were commissioned and about what would happen next. What concerned us was that, although Treasury officials accepted that an initial assessment would be made, they were clear that no assessment would be made further down the line of whether that initial assessment had been reasonable.

Indeed, there has been no learning about the way in which tax is assessed in decisions to go for the PFI, even though that could be used in future contracts. Specifically, officials were clear that there is no commitment from the Government to look at the tax status of funds or even to explore what action might be taken, for example, to require a company bidding for a PFI contract to show in its books that it has been operating in the UK for the past five years, so that we can be confident that the bulk of its work is done in this country and therefore that we would get the tax back. We would then have a reasonable expectation that the Treasury would recoup the general sum that was part of the calculation. This is not a new concern or a new idea; in fact, a previous Labour Member tabled a private Member’s Bill on precisely this point, but it did not receive support from the then Opposition, and I hope that that will change if we can all agree that we want to improve the way in which the PFI operates, if it continues to be taken forward.

The hon. Member for Hereford and South Herefordshire has said that the PFI might be a better model for some types of infrastructure projects than others, but the list of the 61 projects that the Treasury is developing includes a wide range of projects, including hospitals, schools, fire buildings, roads and police stations, so this is a live issue. We could be making progress on challenging the costs to the Exchequer and the value for money of projects, but there is no commitment from the Treasury to look at these issues.

Those are the main concerns that I wanted to put on the record about the hon. Gentleman’s campaign. First, were we to push for a rebate, it would be difficult to get the private sector to renegotiate, although I wish him well in looking for haircuts from people such as David Metter. Secondly, there might be very real consequences for the renegotiation of the cost of the services that are delivered, although I am sure that they would be unintended consequences as far as the hon. Gentleman is concerned.

Thirdly, it is a real concern that we may leave untouched the tax status of these companies and the money that the Exchequer might lose, but which was part of the original decision to go for a PFI project. In putting as much pressure as possible on the Government to talk to companies—the briefing says Ministers have, but the reality revealed in the PAC is that they have not—I hope the hon. Gentleman will also put pressure on them to look at companies’ tax status. I hope he will put pressure on them to look at how we can close the present loophole, so that we can be sure that where an assessment is made of the money that will be returned to the Exchequer over 30 years or whatever term is chosen for the 61 projects, the Exchequer will actually recoup that money. We all agree that value for money should be at the top of the agenda, and we should be thinking about the best way to get the infrastructure buildings that our country will need in the future. If so, how do we make sure, not only when the contract is committed to but in the years ahead, that we are securing that value for money?

I congratulate the hon. Member for Hereford and South Herefordshire on securing the debate, and I urge him to think about his target. I look forward to hearing what he has to say later.