Headlines: June 25th, 1997

Geoffrey Robinson, Paymaster General, with responsibility for the Private Finance Initiative, is to disband the PFI Panel. Since the Panel was set up in 1994 it has acted as facilitator, catalyst and ‘dynarod’ to move the initiative along. It has identified over 1000 potential projects and contributed to getting projects valued at £7.9b across the starting line. The Panel also has a role in disseminating ‘best practice’ and in training.The decision to axe the Panel follows a recommendation by Malcolm Bates, Chairman of Pearl Assurance, who has carried out a review of the PFI machinery. He told Geoffrey Robinson that whilst he acknowledge the value of the Panel he felt their role was unclear.

The PFI will now be taken forward by creating a task force. Geoffrey Robinson said: “I am creating a new Treasury Private Finance Taskforce – combining project and policy expertise. We will appoint a top class Chief Executive on the projects side who will report direct to me. The new Chief Executive will focus on the quality of PFI transactions. He will be supported by 6-8 Executives from the private sector with direct project management experience and financial skills. Until now, the Treasury has been involved too late in the process, leading to frustration and increased costs. The Taskforce will help central government departments and agencies road-test significant projects for their commercial viability before procurement begins.”

“The Taskforce’s policy side will also have its hands full. Malcolm’s review includes specific recommendations to produce rapidly more standardised documentation for key stages of the procurement process. We want greater certainty wherever it can be provided.”

The Bates proposals also include the strengthening of departmental PFI Units, because of the need for departments and agencies to be accountable for their own procurement decisions. However, the review identified an immediate need for strong central input to ensure delivery of quality transactions that provide a sound basis for future business.

The Minister said: “I am confident that the institutional and policy changes to streamline the Private Finance Initiative will provide the foundations on which public and private sectors in partnership can deliver an Initiative to be proud of. The agenda for action is detailed, practical and full of common sense. I am sure it will be welcomed as long overdue by companies and departments who have struggled for too long under previous management. The time is right. My priorities are schools and hospitals. There is also enormous scope in the local government area.