Alistair Craig calls for shake up of costly PFI

The Government's flagship Private Finance Initiative is in urgent need of reform because it is disorganised and too costly, a thinktank report published today has claimed.


And the report from the Centre for Policy Studies called for greater transparency from Chancellor Gordon Brown over PFI liabilities, which researchers claim total some £110 billion. Under PFI, public buildings like hospitals are built and maintained by private companies under contracts often lasting 30 years.


It has been used to drive Labour's large-scale programme of public sector building projects, but has sparked controversy as companies like Jarvis pulled out of unprofitable contracts.


The author of today's report, CPS research fellow and Conservative Parliamentary Candidate for Greenwich & Woolwich Alastair Craig, said that he was not opposed to the use of PFI, but believed it should be handled differently. He called for the abolition of Partnerships UK, a consortium of private sector bodies which uses public money to invest in projects.


Alistair told the BBC Radio 4 Today programme: "The PFI overall has been relatively successful since its introduction in 1994, but the problem has been that, certainly in the last seven years, it hasn't delivered the value for money it could have done.

 

"We are seeing excessive costs being run up and ineffective management of projects by the public sector and a general lack of transparency from the Treasury for PFI liabilities, which is obscuring the debate about whether PFI is a good means of offering value for money for taxpayers, which we actually believe it is.


"We just need to be clear about the extent of the liabilities. Our report is recommending some reforms to make the whole process much more efficient and realise that better value which it is designed to deliver.''
He added: "As a country, we are entering into all these contracts for the next 30 years. When you add up the extent of the liabilities, you get over £100 billion. ``That is fine, because they would have had that liability anyway if the Government had just issued their own gilts on the market, but we just need more transparency around that.''


Alistair said that Partnerships UK had an ``inherent contradiction in its remit'' and should be scrapped, in order to make the PFI process simpler.