By Vivienne Russell | 25 August 2011
Private finance must contribute to the delivery of new roads, hospitals and schools, business leaders said today.The CBI said that, while the government was right to look at how the Private Finance Initiative operates, with public finances tightly constrained, much‑needed infrastructure investment needed to come from the private sector.
Building strong foundations: financing UK infrastructure sets out the CBI’s vision of how infrastructure investment can be boosted through effective public‑private partnerships. These include the government working with industry to produce a range of standardised designs for schools, hospitals and prisons; legislation to accelerate and expand the introduction of Tax Increment Financing to local authorities; and regular retendering of facilities management services such as cleaning.
CBI deputy director general Neil Bentley said: ‘We want to the government to publish a clear, long‑term pipeline of projects so that investors can have the confidence to put their money in the UK. Infrastructure spending also offers one of the biggest bangs for buck in terms of additional economic activity, so this is a chance to generate jobs, growth and build for the future.’
The CBI is also calling attention to the benefits it claims PFI has delivered, including better-designed projects and shared risk. Bentley said hundred of projects had been taken forward since the introduction of PFI, with the majority completed on time and to budget.
‘PFI mustn’t be viewed as the solution on every occasion, but when it has been used effectively it has delivered huge improvements in the UK’s infrastructure,’ Bentley said.
‘Businesses understand that the use of PFI must evolve and that we need to develop new ways to pay for our infrastructure. But ministers must stand up for the role that private finance has to play and decide sooner rather than later how to use it to best effect.’
PFI came under fire last week from the influential Treasury select committee. A report from the cross‑party group of MPs said PFI did not provide value for money to the taxpayer and should be used ‘sparingly’.
