29 September 2000
The proposed public-private partnership is based on unwarranted cost and efficiency assumptions, has badly designed contracts and involves potentially serious safety problems, according to the report from the Industrial Society. It has been designed to favour private sector contractors, and should not proceed without passing a re-specified public sector comparator, examined by the National Audit Office.
For the PPP's opponents the report, written by former Observer editor Will Hutton, provided valuable political ammunition and threatened to overshadow Prescott's key policy speech at this week's Labour Party conference.
London Mayor Ken Livingstone, who commissioned the report with Transport for London, said the project should now be abandoned and warned that he would take legal action if the government presses ahead.
Speaking at a fringe meeting organised by the train drivers union Aslef and the Rail and Maritime Transport Union, Livingstone said: 'My first responsibility is to do what's in the interests of Londoners, and this is not in the interests of Londoners. I will go for judicial review against the decision.'
He added: 'PPP is a private monopoly. There is no competition in any of this. Once they've got the contract for 30 years, they will be able to hold the mayor and the people of London to ransom. PPP is just a licence to steal money. There is one serious bid and one joke bid by one of the other companies.'
Rail unions said the report has 'blown a hole' in the government's PPP plans and raised the prospect of industrial action if safety or service standards were compromised.
Aslef said it was not prepared to accept privatisation of London Underground, while the RMT said it would call a strike if the current project went ahead.
Under the government's PPP plans, the Tube would be split into four sections with private companies running three on 30-year contracts.