Sheffield taxpayers to continue to pay off Amey PFI deal '20 years after contract finishes'
A decision taken by council officers means millions of pounds will continue being paid up to 2057, 20 years after the end of the Streets Ahead contract with Amey.
The firm are responsible for the maintenance of roads, traffic lights, pavements, street trees and bridges in a Â£2.2 billion private finance initiative deal until 2037.
Under the decision, signed off last week, the cost of borrowing for the highways PFI will be extended until 2057. Sheffield Council said that the decision will result ‘in a fairer, more equitable charge between current and future council tax payers.’
But the move has been criticised by City ward Coun Rob Murphy who called it 'our generation's version of the World Student Games'.
During the first six months of 2017/18, the authority repaid maturing debt amounting to Â£21.8m but the council has yet to undertake any new borrowing.
The repayment of these loans has meant our level of internal borrowing has increased.
However, the council claims it has 'sufficient cash resources' to cover both these repayments and 'day to day' cash flow requirements.
Green councillors have called the decision in for further scrutiny on the decision to extend repayments until 2057.
Coun Murphy said: “Aside from the fact future generations have no say on this extra burden, it also assumes the lifetime of the road assets will be 40 years, despite complaints by residents that road surfaces are already breaking up.”
“Not content with making our children pay for their mistakes, this Labour administration is now getting our grandchildren to pay too. Labour leaders should apologise for signing a deal we cannot afford, as they will be long gone by the time it is paid off.
“The council is still paying off World Student Games infrastructure costs, despite Don Valley Stadium being demolished. Rather than clearing its debts before spending more, this Labour-run council has again decided to burden future generations with the pain from their poor decision making.”
The Streets Ahead highways renewal contract was originally negotiated by a Liberal Democrat led council but was finalised under Labour and signed in 2012.
Sheffield Council still owe over Â£100m after building sports facilities for the World Student Games in 1990, according to Sheffield Green Party.
A council spokesman said: “The council is facing continuing budgetary reductions over the next few years and needs to ensure it has stable finances over this period. For this reason, the recommendations outlined in the report suggest amending the basis on which the council pays for the capital investments it makes in assets – including roads.
"This is a technical accounting change, that is in line with a change already made by most councils, and which proposes to apply an industry standard 40 year term to road assets and a 20 year term to street lighting assets created as part of the Streets Ahead programme.“The change is nothing to do with the PFI contract and there is no link to payments to Amey – it is about how we pay for investment in the publicly owned assets we have, including roads.
“The savings made by extending the repayment term on the investment will be invested in social care, which otherwise would face cuts as a result of Government grant cuts.
“The report has been called in for scrutiny next week and a final decision will be announced in due course.”