Infrastructure Improvements: Funding

Lord Low of Dalston Excerpts

Wednesday 23rd November 2016 Lords Chamber

[Lord Young of Cookham]

The noble Lord was, of course, a Minister in the relevant department. He may be aware that, a few months ago, Ministers in CLG announced an initiative to bring back into the market the small builders who have disappeared from it in recent years. The initiative was aimed at making sites available in slightly smaller packages so that the smaller builder would have a chance of developing them, rather than relying on sites that are so big that only major developers can accommodate them.

[Lord Low of Dalston (CB)]

My Lords, does not the Minister agree that private finance initiatives have a very bad record of leaving a legacy of years, or even decades, of inflated debt on projects that are no longer required, such as schools which have been built in the wrong place and accordingly have no pupils, and, as such, need to be evaluated very carefully before being undertaken?

[Lord Young of Cookham]

I think the noble Lord is somewhat harsh in his verdict on the PFI. For example, the NAO says of the PFI:

“Most private finance projects are built close to the agreed time, price and specification”.

It further states that PFI contracts provide,

“two key advantages over conventional procurement … transparency of pricing in that the public sector knows in advance how much it will be paying”,

and a,

“consistent approach to maintenance as the SPV”—

the special purchase vehicle—

“is under an obligation to maintain the asset in good condition”.

Of course, some projects have not gone correctly, but this country is a world leader in the development of private finance and we should be proud of what we have achieved.