By David Williams
16 February 2011
The Treasury has deployed a team of commercial and legal
experts to scrutinise current Private Finance Initiative contracts in an
attempt to find new savings.
Lord Sassoon, commercial secretary to the Treasury, today
launched a pilot project that will examine the details of a PFI contract at
Queen’s Hospital, Romford, in the hope it can become more efficient, flexible
and cost-effective.
A group of professionals with experience in the legal,
technical and commercial aspects of PFI will recommend how ongoing costs can be
saved in the deal, which was signed in January 2004 and still has £835m left to
pay.
Lessons will then be applied across all PFI contracts, which
are expected to cost the public sector £8bn in 2011/12.
Lord Sassoon said: ‘PFI contracts are not immune from
savings. It is critical that government urgently addresses every opportunity
for savings across all contracts. No matter how complex they may be. We owe it
to the taxpayer to eliminate wasteful practice and gold plating in contracts.’
Cabinet Office minister Francis Maude said the Romford pilot
was the first of several reviews of large contracts, not all of which would be
PFI deals, while health minister Simon Burns said it was ‘great news for the
hospital’.
Burns added:‘The focus must be to find efficiency gains and
savings within the PFI contract, allowing the quality of care and patients
themselves to remain the priority.’
The Treasury published draft guidance on how to make savings
in PFI last month. This will be revised when the Queen’s Hospital pilot has
been completed.
The pilot is part of a wider public sector contracts review
as a result of an efficiency study conducted last year by Sir Philip Green.
