A leading left-wing think-tank has called for a comprehensive review of value for money in private finance initiative (PFI) projects.
In research published yesterday, the Institute of Public Policy Research (ippr) added that unless benefits could be proven the government should introduce alternatives to the PFI method.
The research said that claims that the schemes represented good value for money were meaningless as only 6% of those completed had been examined by independent auditors.
It also argued that there is no evidence to show whether or not PFI schemes deliver expected benefits once they are underway.
Paul Maltby, ippr’s public private partnership research fellow, said: “In theory PFI can deliver better-quality services at less cost to the taxpayer, but in sectors such as health and education these expected benefits are in doubt.
“The government needs to commission an independent review of the PFI so we know where it is and is not working.
“Where the PFI is shown to deliver poor results the government should not be afraid to use alternative options, including other types of public private partnership.”
The report added the value for money assessments that are used are “subject to inherent uncertainty and subjectivity”.
It also stated that pressure on managers skews the results.
“There is substantial pressure on managers to ensure that the PFI option appears better than the alternative: failure to do so will often result in the project being scrapped.”
Out of the 378 PFI projects completed by central and local government, just 23 have had any independent examination of value for money by official audit bodies.
EGi News 11/02/02
