MPs’ damning verdict on value of PFI deals (From The Northern Echo)

MPs’ damning verdict on value of PFI deals

7:52am Tuesday 27th November 2007 in

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ANOTHER key plank of Gordon Brown's record has come under fire as MPs warned that the taxpayer is getting a raw deal from the Private Finance Initiative (PFI).

Some local councils are being forced to cut services because private firms are exploiting the flagship Treasury scheme to push up prices, according to the Public Accounts Committee.

The report highlights poor tendering processes which put the public sector in a "vulnerable" position as there is not enough competition for major contracts.

Committee chairman Edward Leigh said the bidding process for PFI deals had got worse since the MPs last examined it four years ago.

Tendering needed to be competitive in order to ensure value for money for the taxpayer, but a third of recent projects only had two viable bidders, the report found.

The Tory MP said: "The lack of PFI expertise among the public sector procurement teams is resulting in poor negotiating with bidders who often have the whip hand.

"The public sector must not be placed in this vulnerable position."

There are now 800 PFI contracts with private suppliers, which will be worth a total of £155bn up to 2032.

The CBI insisted the scheme was still vital for delivering public services.

Director of public services Neil Bentley said. The PFI will continue to be crucial to building new infrastructure such as schools, hospitals and waste plants and so the public sector must do more to develop its procurement skills to get the best out of the model."