Private Finance Initiative
Debate between Steve Barclay and Stella Creasy(13 years ago)
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Stephen Barclay
My hon. Friend is absolutely right. It is helpful for the Minister to look at that example as a benchmark.
Secondly, although I am conscious of time, I want to cover the public sector comparator. Hon. Members have touched on the fact that it has often been flawed, because the PFI was a way of taking deals off the balance sheet and it was the only show in town, but there have been other imperatives. There was a regulatory imperative—not to mention, with a lot of marginal seats in the north-west, a political imperative—to go ahead with the Manchester incinerator, even though it was, at 350 base points, over and above the 300 threshold that the Treasury had at the time. Likewise, there was a defence imperative to go ahead with the air tanker contract, which was appalling value. The existing fleet was falling apart and there was no fall-back position, so there was a defence need for that contract to go ahead. It would be interesting to get from the Minister a sense of the extent to which guidance has changed to guard against some of those risks, and how we as a House get visibility of whether a viable fall-back position has been developed for some of those 61 contracts.
Thirdly, specifically on defence, the response in the Treasury minute of December 2010 is a little ambiguous. It says:
“The Government does not agree with the Committee’s conclusion…on the applicability of PFI to Defence, but agrees with the Committee’s recommendation.”
It will be interesting to see how guidance on defence PFIs will be refined.
I welcome the appointment of David Pitchford in connection with the major projects defence review. That will be useful in addressing some of the problems we see with these contracts, such as their long-term nature and the increased costs.
Stephen Barclay
I will give way, but I wish to allow time for my hon. Friend the Member for Warrington South to speak.
Stella Creasy
Briefly, does my colleague on the Public Accounts Committee share my concern that Mr Pitchford has said that he was not looking at PFI as part of his work in the Major Projects Authority? That seems to have been an oversight.