07 June 2002
The union has examined 16 outline business cases for education PFIs, drawn up by Scottish local authorities, and says it found a pattern of 'purely notional risk transfer'.
Dave Watson, Unison's Scottish organiser, said most of the PSCs were based on false premises, and would lead to poor value for money for taxpayers.
'All the projects we have seen add a risk transfer cost to the public sector alternative, which masks the cost difference between the public and the private sector,' he said. 'But the risk doesn't get transferred. In all the outline business cases we have seen, if the contractor goes bust or fails to deliver an adequate service, the authority picks up the tab.'
Unison published its analysis as Jeremy Colman, deputy comptroller and auditor general at the National Audit Office, voiced his concerns that some PSCs were based on 'pseudo-scientific mumbo-jumbo', in which financial models were so complicated that few people really understood them. There was 'scope to manipulate' the figures, he told the Financial Times.
'People have to prove value for money to get a PFI deal. But because that is wrongly seen to be demonstrated only by the public sector comparator, it becomes everything. If the answer comes out wrong, you don't get your project, so the answer doesn't come out wrong very often,' he said.
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