DEMANDS have been issued that the city council renegotiates a massive £1bn contract after a damning report concluded millions of pounds of taxpayers’ money have been wasted on Private Finance Initiative schemes.

The Green Party leader called on the Labour administration to rip up the nine-figure, 25-year waste management contract issued to Veolia by Brighton and Hove City Council and East Sussex County Council in 2003.

But neither council leader Warren Morgan, nor Tory leader Cllr Tony Janio, could promise any administration they led would steer clear of PFI projects.

The row was sparked by a National Audit Office report published on Thursday morning into PFIs.

It concluded building schools and hospitals privately costs taxpayers billions of pounds more than public sector alternatives.

The report said one group of schools cost 40 per cent more to build, and a hospital 70 per cent more, than if they were financed by government borrowing.

Brighton and Hove has largely avoided the controversial funding mechanism introduced by the Major government and extensively utilised by the Blair and Brown governments.

The 2005 regeneration project which included the Jubilee Library was a PFI scheme.

PFI also financed construction and services for a group of the city’s secondary schools, beginning in 2002.

That contract was heavily criticised after one of the providers hit financial trouble and left taxpayers out of pocket.

The city’s biggest PFI scheme, worth around one billion pounds, was a 25-year Integrated Waste Management Services Contract awarded in March 2003 to Veolia Environmental Services by Brighton and Hove City Council and East Sussex County Council.

The contract is for disposal of the waste in Brighton and Hove and the management of household waste recycling sites.

Refuse, recycling and street cleansing services are provided directly by Cityclean, the council’s in-house team, not by an external contractor.

In response to the NAO report, Green group leader Phelim MacCafferty said: “The NSO’s damning report confirms that PFI rips off the taxpayer.

“Armed with this compelling information, it’s clear the time has come to halt the practice of using PFI, not least because at a time of massive public sector cuts the millions that have been wasted could have been spent improving public services.

“The Labour Council is in a position to renegotiate existing contracts so they represent better value for the taxpayer and respond to local needs and environmental concerns.

“This includes the massive contract with waste company Veolia.

“Sheffield Council has recently renegotiated its waste PFI deal and Labour here should follow its lead.”

Asked whether Brighton and Hove City Council believed its own PFI contracts represented good value for money, a council spokesman replied: “All contracts are underpinned with value for money as a central consideration.”