22 November 2002
In a move that is likely to outrage opponents of PFI, the NAO said trusts could spend too much time refining financial comparisons at the expense of a more valuable, rounded assessment of the value for money offered by private finance.
The message comes in the auditors' assessment of the £125m scheme at West Middlesex University Hospital trust.
In the PFI development stages, trusts work up a public sector comparator to show the relative costs of a privately financed and traditionally funded scheme. West Middlesex's initial calculations showed a public scheme would be slightly cheaper. This was revised following concern about the robustness of the figures, which eventually showed a saving of £5.5m over the public sector scheme.
The NAO said West Middlesex did not include a wider assessment of the benefits of the PFI. It had spent a lot of time recalculating financial projections because it feared the PFI would be rejected if it were more costly.
The report added that the Department of Health would not necessarily throw out a 'slightly' more expensive PFI project if there were 'convincing value for money reasons' for proceeding.
Commons Public Accounts Committee chair Edward Leigh echoed the NAO's concerns.
'The public sector has got to look to the wider benefits and not tie itself in knots recalculating ever-more complicated equations. The PFI deal brought benefits at a reasonable price. The trust should have just left it at that.'
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