PFI Hospitals. Remember them?

After a hiatus caused by the NHS鈥 money problems, the first of a new wave of schemes is about to come to the market. The 拢374m Bristol North PFI is also the first to have a little genetic engineering from Partnerships UK, which has taken into account last year鈥檚 Treasury white paper. It won鈥檛 be tendered with catering and cleaning 鈥 the so-called soft services 鈥 as part of the package. And generic designs for rooms will be drawn up before it goes out to tender, a variant of 鈥渟mart PFI鈥. It鈥檚 also the first big hospital to adhere to the EU procurement rules that force at least two bidders to go to the wire.

This 鈥渃ompetitive dialogue鈥 process sounds rather cuddly and co-operative, but in reality it鈥檚 no such thing. It does away with the step of appointing a preferred bidder that the trust then negotiates with. Instead, the contenders work up fairly detailed designs and base their final price on them. For a hospital the size of Bristol, it鈥檚 thought that that will raise bid costs to about 拢5m. Although PFI hospital work is hard to come by, contractors鈥 PFI teams are still busy on 好色先生TV School for the Future, and there鈥檚 plenty of other work around. Bristol is contemplating reimbursing some costs to get three contenders to go the full way. It will need to. Betting 拢5m when you鈥檙e twice as likely to lose as win surely makes no sense, even for the hungriest PFI specialist.

So it all comes down to money

Time for a reality check. As we said last week, all the new ideas, initiatives and chatter about cutting carbon can fool us into thinking we鈥檙e making more progress than we truly are. A survey we carried out in conjunction with Corenet, which represents 500 of the biggest landlords and tenants in Britain, underlines just this point. The results, which will be presented at our Think conference next week, reveal just how hard it will be to meet one crucial target, that of cutting energy use in existing office buildings.

The main reason for not making improvements was cost (42%), followed by the landlord鈥搕enant divide (30%). But perhaps the most disappointing finding was that energy performance certificates 鈥 the washing machine-style energy labels that come into force next April 鈥 will have no impact on 75% of occupiers.

This particular finding raises a number of questions. For example, if energy labelling doesn鈥檛 change behaviour, then what will? Large corporations are increasingly pledging to become carbon neutral, but how do they think they鈥檙e going to do that if they鈥檙e not prepared to pay to upgrade their offices?

The survey is clear that financial incentives, particularly reduced business rates, would be the best drivers for change. The reality, though, is that tougher regulation would be more pain for business, but less pain for the Treasury.

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