- Video report by ITV News Political Correspondent Carl Dinnen
A Labour government would bring contracts signed under the Private Finance Initiative (PFI) back into the public sector, the shadow chancellor has said.
PFI arrangements use private money to finance new public projects such as schools, hospitals, prisons or roads.
Addressing Labour's annual conference in Brighton, John McDonnell said it was a "scandal" that PFI deals will see nearly £200 billion paid to private companies from the public sector over the next few decades.
Under Jeremy Corbyn's leadership, the party has already promised not to sign any new PFI contracts.
"We will go further. I can tell you today, it's what you've been calling for. We'll bring existing PFI contracts back in-house, " Mr McDonnell said to loud applause.
The PFI scheme
PFI was introduced in 1992 by former Conservative prime minister John Major.
It was stepped up significantly under Tony Blair's Labour government when it was used to fund the construction and operation of public sector infrastructure.
Under the scheme, a private sector consortium funds, builds and maintains a facility on behalf of a public agency, then receives payments over the term of the contract, typically lasting 25-30 years.
It has led to complaints that the NHS and other public bodies are forced to pay many times the original value of the property over the course of time, while the contracts are frequently sold on by the original consortium.
Mr McDonnell said it has resulted in "huge, long-term costs for tax payers, whilst handing out enormous profits for some companies".
"Profits which are coming out of the budgets of our public services," he insisted.
"Jeremy Corbyn has made it clear that, under his leadership,never again will this waste of taxpayer money be used to subsidise the profits of shareholders, often based in offshore tax havens," Mr McDonnell said.
"The Government could intervene immediately to ensure that companies in tax havens can't own shares in PFI companies, and their profits aren't hidden from HMRC.
"We'll put an end to this scandal and reduce the cost to the taxpayers."
Aides to the shadow chancellor said the party would aim to ensure that NHS trusts, local councils and others do not lose out, and that services and staff conditions are not harmed.
Alternative public sector models for funding infrastructure will be developed, with the aim of saving tax-payers' money and improving services and working conditions, a spokesman said.
During his wide-ranging keynote speech, the shadow chancellor also spoke about Labour's plans to cap credit card interest so that no-one pays back more than twice the amount of their original loan.
He also challenged ministers to apply the same cap as on pay-day loans, limiting interest and charges to 100% of the amount borrowed.
"More than 3 million credit card holders are trapped by their debt. They’ve paid more in interest charges and fees than they originally borrowed.
"I am calling upon the Government to act now and apply the same rules on payday loans to credit card debt.
Mr McDonnell added: "If the Tories refuse to act, I can announce today that the next Labour Government will amend the law. Call it the McDonnell amendment."
Mr McDonnell also pledged that his party will address the gender pay gap in the UK which sees women earn on average 18% less than men.
He also announced plans for a new Strategic Investment Board to channel funding into keeping Britain up to speed with the "fourth industrial revolution".
Mr McDonnell also confirmed that Labour would scrap university tuition fees, overturn Conservative trade union legislation and nationalise rail, water, energy and the Royal Mail.
Mr McDonnell's speech ended with a rallying cry for delegates to "never forget that we are part of that great Labour tradition".
He went on: "It will be up to us to lay the foundations of the new world that awaits us."
Delegates gave the shadow chancellor a standing ovation as he told them: "For years we have proclaimed that Another World Is Possible.
"I tell you now, that world is not just possible, it is in sight. Let's create it together."
Watch John McDonnell's full speech at the conference (scroll to 16:19)