Clegg backs PFI deal in own city but denies any U-turn

Before they came to power, Mr Clegg and the Prime Minister, David Cameron, had both been highly critical of Private Finance Initiative deals, a Government-backed way of using private firms to build and run public buildings on their behalf – so keeping the debt off the national accounts.

Before last May’s General Election, Sheffield Hallam MP Mr Clegg described the PFI model as “a bit of dodgy accounting – a way in which the Government can pretend they’re not borrowing when they are, and we’ll all be picking up the tab in 30 years”.

A Treasury select committee report earlier this month slammed the deals as “an accounting trick to hide debt”, concluding they can typically cost up to 40 per cent more than if they been funded with normal public borrowing.

Yet despite the criticism, the Coalition has signed off more deals this year than in the last two years of the Labour Government, with more than £4bn of projects set to be finalised in Yorkshire this year.

They include the biggest PFI deal ever seen in the region, with Sheffield City Council agreeing a radical £2bn contract for a private firm to take control of the maintenance of the city’s entire network of streets and highways.

Mr Clegg, speaking to the Yorkshire Post, refused to condemn the Sheffield scheme but insisted his stance on PFI has not changed.

He said: “I don’t think you should be ideological about PFI – to put it bluntly, some PFI schemes are good and some are bad. Some of the early ones have proved to be very poor value for money, and were used by the previous Government as an accounting trick.

“A lot of lessons have been learned from that, a lot of improvements have been made, and I am confident that will be reflected in what will be much-needed investment in very poor road surfaces left neglected by Labour for years and years in Sheffield.”