Oral Answers to Questions

Lord Johnson of Marylebone Excerpts

Tuesday 21st December 2010 Commons Chamber

[Tony Baldry (Banbury) (Con)]

13. What recent assessment he has made of the effectiveness of the private finance initiative.

[Joseph Johnson (Orpington) (Con)]

15. What recent assessment he has made of the effectiveness of the private finance initiative.

[The Chief Secretary to the Treasury (Danny Alexander)]

In the spending review the Government abolished the private finance initiative credit system, which provided Departments with a ring-fenced budget that could be used only to support local authority PFI projects. The change levelled the playing field between PFI and other forms of procurement.

--- Later in debate ---

[Danny Alexander]

I am grateful to the hon. Gentleman for his festive offer of assistance with these matters. I urge him and other colleagues on both sides of the House to draw the Government’s attention to areas where they see PFI schemes being wasteful, or to examples that they would like to bring to our attention. I would be only too delighted to pick those up if he drew them to my attention.

[Joseph Johnson]

Has my right hon. Friend had a chance to read the Public Accounts Committee’s recent report on PFI in the credit crunch? It suggested that many projects are locked into very high financing costs for periods of up to 30 years. I wonder what scope there is to claw back some of the gains in the event of any refinancing.

[Danny Alexander]

The Treasury will respond in the normal way to that report, and it would not be proper for me to comment on it until we have published the relevant Treasury minute. The Treasury and the Cabinet Office are working closely together to ensure that the PFI industry contributes its fair share of savings from operational projects.