It owns four-fifths of the PFI school in Clacton which has now closed – but for which taxpayers must still pay it £1.4 million a year, Innisfree’s share of the deal, until 2035. It owns the Birmingham school where parents couldn’t start an after-hours club to keep their kids off the streets – because Innisfree charged £70 per hour for a caretaker. It had a 50 per cent stake in the calamitous Defence Animal Centre deal, where each dog kennel cost more per night than a five-star hotel room (though admittedly not as much as Mr Metter’s suite in Chamonix.)
Innisfree has the Queen Elizabeth Hospital in Woolwich, where it effectively locked taxpayers into a 60-year contract. And it has a quarter of the Norwich and Norfolk Hospital – where Innisfree and its partners refinanced their debt, lengthening the NHS’s repayment term from 34 to 39 years, but raising their own rate of return from 16 to 60 per cent. Only a small portion of the refinancing gain was shared with the taxpayer.
Of course, the prices we pay to PFI companies include interest, inflation, and often support services, such as maintenance – but they also include, numerous independent academics have warned, “significant excess returns” for the companies and “far above market” financing costs for the taxpayer. Even repayments on a normal mortgage, of the kind you or I could get, work out at perhaps just three times a property’s capital value.
Innisfree insists that it risks its own money, or that of its investors, in deals which can go wrong. But actually, it invests only tiny amounts. The hospitals it owns or co-owns have a total capital value of £4.8 billion; Innisfree’s share of them is worth about £2.2 billion. By its own account, the actual amount of money it has put into those hospitals is £376 million, or an average of £13 million per hospital. The rest is borrowed.
And from the company’s latest accounts it does not, to be blunt, look too great a risk. Last year, Innisfree made 53 per cent profit on its turnover. A highly successful FTSE company, such as Tesco, reckons to make 6 per cent.
Mr Metter collected pay and dividends of £8.6 million last year, and can afford an enviable lifestyle. He has a £5 million villa in London’s chi-chi Little Venice. Skiing in Chamonix’s expensive mountains is an annual treat for the “PPP Forum”, his lobbying group – its brochure jokes about “high-level networking”. Ninety people, the cream of the PFI business, went last year, most staying at the Albert the First or the second-best hotel in town.
All credit, some may say, to Mr Metter for spotting a wholly legal and legitimate business opportunity, one which has lifted him from middle-ranking property manager to multi-millionaire. But public spending is falling and the storm clouds are gathering – interestingly, from the Right.
Edward Leigh, the Thatcherite Tory who until last year chaired the Commons’ public accounts committee, called the Norwich hospital deal “the unacceptable face of capitalism”. Another Tory MP, Jesse Norman, now says Innisfree has “made more money for less work than any other group of people I can think of”.
Mr Norman leads a cross-party campaign asking PFI contractors to give back some of their profits, or bend their inflexible contracts to the austerity era. Mr Metter did not respond to our questions asking whether he would consider this. Nor did he answer whether he pays UK tax.
Mr Metter may, I suppose, reckon that he has legally binding agreements and no great reason to worry about being unpopular. But then, so did RBS’s Sir Fred Goodwin.