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End of PFI as we knew it?

UKWIN received the following from Jane Green of the Coventry 2020 Zero Waste Project:

Dear All

This week is set to mark the end of PFI as we’ve known it. A Panorama programme is due to air today (Monday 28th November 2011) that focusses on the subject of PFI contracts, and on Thursday (1st December) we have the Treasury’s call for evidence for its inquiry into alternatives to PFI.

PFI has massively favoured incineration. The weighting given to ‘bankable technology’ and giant infrastructure has more-or-less ruled out modular flexible alternatives. On top of this, PFI credits have been given as inducements for councils to take on PFI debt. These credits amount to far more than is being given to the Green Investment Bank to support the development of new waste technologies.

Of the total 61 PFI projects still about to go through under the old discredited system, 39% are for waste infrastructure. This is the largest tranche, representing 3 times that for hospitals and 7 times that for schools. Of the 11 PFI waste contracts under procurement 9 are for incinerators. Along with other waste PFIs still in the pipeline this sector accounts for £3 billion of capital spending.

Jesse Norman MP, who led the campaign to secure a review of PFI, has called for a moratorium on all PFI procurement currently in the pipeline. The Treasury has so far ignored this demand.

PFI reform: Treasury call for evidence

The Government will be launching a call for evidence on 1 December 2011 that aims to capture the learning and lessons of the past 20 years of PFI.

We will look to use those lessons to help inform the development of a new model that addresses the concerns of PFI. We invite those across the private and public sector that have strong ideas on how the future model should work to come forward with proposals and contribute to the development of a new delivery model.

The Government’s approach to reform will be guided by the following principles, to create a model that:

  • is less expensive, and that uses private sector innovation to deliver services more cost effectively;
  • can access a wider range of financing sources, including encouraging a stronger role to be played by pension fund investment;
  • strikes a better balance between risk and reward to the private sector;
  • has greater flexibility to accommodate changing public service needs over time;
  • maintains the incentive on the private sector to deliver capital projects to time and to budget and to take performance risk on the delivery of services;
  • delivers an accelerated and cheaper procurement process; and
  • gives greater financial transparency at all levels of the project so that the public sector is confident that it is getting what it paid for, and that the taxpayer is sure it is getting a fair deal now and over the longer term.

Monday 28th November 2011, 8:30 pm on BBC One: Who’s Getting Rich on your Money?

As Government spending cuts bite, one group of businessmen know they will keep making vast profits from our taxes while getting us ever deeper into debt. Since 1997 almost every new school and hospital in the UK has been built by private companies who lease them back to the government. But what’s in it for the taxpayer?

John Ware investigates the inflexible terms and conditions of what has become the government’s flexible friend – the Private Finance Initiative – a kind of ministerial credit card which racks up huge public debts without showing on the nation’s balance sheet. He uncovers evidence of how government claims that PFI gives taxpayers value for money have been manipulated.

And he asks why the coalition government signed so many PFI deals when in opposition both the prime minister and his deputy branded them as ‘dodgy accounting’.

Reporter – John Ware; Producer – Leo Telling; Executive Producer – Eammon Matthews

Monday 28 Nov 2011, 20:30 on BBC One
Thursday 1 Dec 2011, 04:30 on the BBC News Channel
Friday 2 Dec 2011, 00:25 on BBC One (except Northern Ireland, Wales)
Sunday 4 Dec 2011, 20:30 on the BBC News Channel

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