Labour has promised to end the use of public finance initiative (PFI) contracts and bring existing contracts back in-house.

During his speech at the Labour Party conference in Brighton, shadow chancellor John McDonnell said: ‘The scandal of PFI, launched by John Major, has resulted in huge, long-term costs for taxpayers while handing out enormous profits for some companies.

'Profits which are coming out of the budgets of our public services.'

Mr McDonnell said that over the next few decades nearly £200bn was scheduled to be paid out of public sector budgets to private investors as part of PFI deals.

He claimed a lot of the profits from PFI deals was going to shareholders - many of whom were based in offshore tax havens.

Mr McDonnell continued: ‘We'll put an end to this scandal and reduce the cost to the taxpayers.'

According to the National Audit Office, in 2013/14 around £10bn was spent on servicing private finance contracts, with about £4bn of this related to debt and interest.