Headlines: April 12th, 2002

The system for calculating central government support for local council projects using private finance is to be streamlined to encourage more use of PFI funding. Over 180 PFI projects, including schools and leisure centers, are in the pipeline, but the streamlining underlines the Government’s continuing commitment to partnership between local councils and the private sector.The changes remove some of the complexity of the PFI procedures by simplifying the way the total amount of support is assessed and the way the payments are staged over the life of a contract, which can extend over 30 years. The Treasury normally insists that technical changes of this kind have a neutral effect producing winners and losers. The DTLR have given an assurance that there will be no losers and some councils will gain marginally.

This move follows the announcement last month that a Code of Conduct will be introduced to protect the rights of workers employed by private companies to deliver public services. The Code has been welcomed by the CBI and by UNISON, the largest public sector union. The recent decision to provide funds to compensate Railtrack shareholders is seen as a way to restore confidence in the private sector and encourage investment to support public service reform.