Headlines: October 25th, 2005

Britain’s largest union – UNISON – is claiming a new report shows that Private Finance Initiative schemes do not out-perform public sector projects by coming in on time and on budget. The union says the report, “A Policy Built on Sand”, ‘nails the claim that the extra costs of PFI are offset by increased efficiency’.UNISON says the report, produced by Professor Allyson Pollock, David Price and Stewart Player from the Public Health Policy Unit, at University College, London, also knocks out the Government’s arguments for the continued use of PFI schemes to build hospitals, schools and other public sector projects. The union says that with 677 PFI projects approved since 1992, the Treasury has not fulfilled its objective of a “sound evidence base” for a “rigorous investigation” of PFI.

The Treasury has claimed its evaluations show that 88 per cent of Private Finance Initiative schemes are delivered on time compared with 70 per cent of non PFI projects which are delivered late, with almost three quarters of them coming in over budget. The new report, though, says five research studies, cited as the source of the cost and overrun data, are fatally flawed and not credible.

Of the five studies, the UNISON report says two were conducted by the National Audit Office and were surveys and consultations with project managers and did not have any data on time and cost over runs, a third study was conducted by a private sector body, the Treasury’s own report contained no data assessing cost and time overrun and its methodology is not in the public domain and the fifth was conducted by a company which acted as a technical adviser on PFI deals.

Dave Prentis, UNISON ‘s general secretary, said it had always argued that PFI was a waste of taxpayers’ money but this new report knocked out one of the Government’s chief arguments for going on with PFIs, namely that it generated value for money by improving the efficiency of construction procurement.