Public Accounts Committee tells Treasury 鈥榯o level鈥� with taxpayers on initiative
The Public Accounts Committee has called on government to tell taxpayers about the Private Finance Initiative鈥檚 value for money.
The committee鈥檚 report on PFIs, , said the Treasury had no plans to assess the value for money of the model which was first introduced back in the 1990s.
The committee said PFI鈥檚 initial benefit was that expenditure had been kept off the government鈥檚 books but the ongoing costs to the institutions at the front line have been high and the contracts inflexible.
Meg Hillier, chair of the Public Accounts Committee, questioned the worth of PFI, which has been in the headlines since Carillion鈥檚 collapse.
Three PFI projects were cited as problem contracts in the failed contractor鈥檚 first profit warning last July, contributing to a provision of 拢845m 鈥� of which 拢375m related mainly to the three UK projects.
These were later identified as the 拢550m Aberdeen Western Peripheral Route, the 拢335m Royal Liverpool Hospital (pictured) and the 拢430m Midland Metropolitan Hospital.
She said: 鈥淢uch has changed in the past quarter-century but government鈥檚 inability to answer basic questions about PFI remains undimmed.
鈥淚t beggars belief that such apparently institutionalised fuzzy thinking over such large sums of public money should have prevailed for so long.
鈥淭he Treasury simply cannot support its assertion that PFI represents good value for money. Yet while government is now seeking to collate the PFI data that does exist, it does not intend to publish the results of this work. This is unacceptable. Government must level with taxpayers about the value of PFI.鈥�
The committee said it was disappointed that concerns it had raised about the model in 2011 had not been addressed.
It said government鈥檚 reform of PFI had been fairly limited, with its follow-up PF2 allowing 鈥済reater transparency on a method that didn鈥檛 change fundamentally鈥�.
Hillier said government also had to be clearer with public bodies about how it intended PF2 to be used.
She said: 鈥淭he Treasury and Infrastructure and Projects Authority must also be far clearer about how it expects public bodies 鈥� many of whom are already locked into costly and inflexible PFI projects 鈥� to use PF2.
鈥淲e are not convinced the design of PF2 has fixed the underlying weaknesses of the previous method.
鈥淕overnment鈥檚 own figures suggest the UK needs to spend some 拢300bn on infrastructure over the next couple of years. It is critical that taxpayers are not further lumbered with excessive costs arising from poor contracting.鈥�
The committee said there were only a handful of PF2 projects in the pipeline, suggesting government had 鈥渓ost faith in its own usage of PFI鈥�.
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