John McDonnell called PFI a “scandal” with companies making “enormous” profits from deals with “huge, long-term costs for taxpayers”.
He also pledged to bring rail, water, energy and Royal Mail under public sector control, in his address to Labour Party delegates.
McDonnell said Labour would not sign any new PFI contracts and would bring all existing ones “in-house”.
Although, Labour released a press release after the speech, saying the party would “review all PFI contracts and, if necessary, take over outstanding contracts and bring them back in-house”.
It added this would be: “While ensuring NHS trusts, local councils and others do not lose out, and there is no detriment to services or staff”.
McDonnell stressed to the conference profits made by PFI companies where “coming out of the budgets of our public services”.
“Over the next few decades, nearly two hundred billion is scheduled to be paid out of public sector budgets in PFI deals,” he said.
“In the NHS alone, £831m in pre-tax profits have been made over the past six years. As early as 2002 this conference regretted the use of PFI.”
He said a Labour government would intervene to ensure companies in tax havens did not own shares in PFI companies.
A report by the Centre for Health and the Public Interest, out last month, said government money was “leaking out of the NHS” through profits made by PFI companies, as reported by Public Finance.
In his speech, McDonnell also declared: “Building an economy for the many also means bringing ownership and control of the utilities and key services into the hands of people who use and work in them.
“Rail, water, energy, Royal Mail- we’re taking them back.”
McDonnell also called for an end to the public sector pay cap for all state employees and a £10 minimum wage for workers.
The think-tank Institute for Fiscal Studies released research this month saying scrapping the 1% pay cap increase could cost the Treasury £6bn a year.
