Headlines: June 18th, 1997

Disappointment at the slow progress of the Public Finance Initiative may be premature. Explanations for stunted growth such as ‘the traditional methods of the public and private sectors are difficult to overcome’ may be wide of the mark. The Treasury estimates the total projects at the turn of the century to be £10b.This figure is challenged by the Private Finance Initiative Journal survey of 500 projects which found the total value of deals to be £15.8b. This figure includes £7.7b currently in negotiation with a preferred partner. The Treasury’s estimate for these project is very similar at £7.9b. The estimates of the Treasury and Journal differ in their estimates of future deals. The Journal’s survey includes 107 projects worth £8.1b which have shortlisted bidders. The Treasury’s estimate only recognises £2.1b of these pipeline projects.

The difference in estimates may be of little importance because a number of changes are planned. William Hudson of the Journal said: “The PFI could be very different in the near future.” Geoffrey Robinson, the Paymaster General, who has the responsibility for PFI, will reveal the Government’s thinking on Monday 23 June.