03 September 2004
Government departments are using the Private Finance Initiative to get projects off their balance sheets, rather than because it offers the best value for money, a Labour-aligned think-tank has claimed.
The Institute for Public Policy Research said in a report published on September 1 that there is still no level playing field between the PFI and conventional funding.
This is despite the Treasury statement last year in PFI: meeting the investment challenge, that the initiative should be pursued only where it offers best value and not simply to remove investment from departmental balance sheets.
The IPPR report, Three steps forward, two steps back, calls for a single capital budget to cover projects funded through the PFI and those with conventional financing.
This would remove the 'balance sheet' advantage, leaving value for money as the sole ground for choosing the PFI.
Report author Tim Gosling said: 'The government has made some welcome progress in reforming the PFI but it needs to go further.' He also called on the government to force all public-private partnerships to improve their accountability by adopting the same openness standards as the National Health Service.
The institute called for vigilance to make sure that more information on PPPs becomes public when the Freedom of Information Act takes effect in January, and that its exemptions are not abused.
Gosling also said the government should extend 'two-tier' protection across all outsourced workforces, so that those who join later work on terms no less favourable than those who transferred from the public sector.
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