The public accounts committee found that 23 per cent of public sector organisations believe that value for money has declined since their contract was agreed.
The committee said that high prices being charged for services were a particular concern.
In addition, only around half of 400 private finance initiative (PFI) contracts have mechanisms in place to ensure that the public sector continues to receive value for money.
MPs also found that there was insufficient guidance and training for public bodies involved in the management of contracts.
The initiative allows councils and other public bodies to spread the cost of large building work over time. Private sector companies pay the upfront costs and in return receive an annual fee for the management and upkeep of buildings.
Last year PFI accounted for more than a quarter of capital spending on schools. So far, around half of England's local education authorities have made use of the scheme to renovate and build schools. In all, since 1997 contracts for 47 education PFI projects have been signed, covering 550 schools, with a total value of pound;1.2 billion.
Projects cover a wide range from maintenance of school buildings to new and replacement schools, sports facilities and information and communication technology provision.
Dave Prentice, general secretary of the public sector union UNISON, said:
"This is a damning indictment of the PFI process and shows what a giant waste of taxpayers' funds it is."