‘Discredited’ PFI escapes with a makeover – FT.com

 

English: East entrance of HM Treasury Français...

English: East entrance of HM Treasury Français : Entrée Est de HM Treasury (Photo credit: Wikipedia)

English: Omagh College This building was built...

English: Omagh College This building was built under PFI (Private Finance Initiative) The windows are being cleaned from the ground using a pole water feed system. (Photo credit: Wikipedia)

This is an interesting article in the FT. Check it out!

via ‘Discredited’ PFI escapes with a makeover – FT.com.

I believe that the original PFI was conceived by a management consulting firm. No doubt other consultants will have been called in by the Treasury to advise on the makeover.

Do you have any views on PFIs as a means of financing Public Sector capital projects?

 

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4 responses

  1. Pingback: Help to Buy: mortgage guarantee available 3 months early – News stories – HM Treasury – GOV.UK « Dr Alf's Blog

  2. Pingback: Radical reform of PFIs – John Gelmini « Dr Alf's Blog

  3. Andersen Consulting, now Accenture devised the original formulas which were used to determine whether or not PFI deals made good value for money for taxpayers.

    The formulas allowed for cost overruns of up to 38 times what given costs would normally have been, which is one of the reasons so many PFI hospitals are in trouble, along with the NHS Trust areas they reside in.
    The satirical magazine Private Eye and the left-wing journalist, the late Paul Foot, campaigned tirelessly and for decades against the widespread waste, fraud and criminality that accompanied many of these PFI deals which we as taxpayers are still saddled with to this day.

    Whatever “making over” has been done, it is not a substitute for a new transparent value for money PFI formula and a police investigation of all those who have benefitted financially from the worst PFI deals.
    Such an investigation needs to be thorough and wide ranging and include all the Civil Servants who were involved whether alive or dead.

    All monies should be recovered where malfeasance is discovered and proven and in the case of deceased PFI directors and Civil Servants engaged in proven malfeasance and criminality, the estates and living trusts they left behind should be sequestered to repay taxpayers.

    Trust CEOs’, County Council Chief Executives and heads of Schools Childrens and Families Directorates who allowed their customers and council taxpayers to be fleeced in this way should be dismissed for industrial misconduct and breach of fiduciary duty and personally surcharged to the same extent as a Lloyds “Name”.
    They should be barred from holding a similar role, even in an interim capacity, for life.

    Privatization was and is an excellent idea and I do not mean to suggest that it should not be used along with PFI initiatives to get much needed infrastructure built now.

    However, whilst PFI contractors and outsourcers are fully entitled to make healthy profits, there has to be a test of reasonableness and value for money for taxpayers, applied rigorously and transparently to each deal.

    Secondly, no deal should be for more than 30 years because to exceed this is to bind future generations and mortgage the futures of people who have not yet been born.

    • John

      Many thanks for a detailed and thoughtful response which I have re-blogged widening the public debate on this important area.

      Whilst, I broadly endorse your views here, I do not necessarily blame Andersen Consulting, now Accenture, for this misguided decisions from politicians and bureaucrats in HM Treasury. For me, it also raises a much bigger issue of public accountability, namely the relationship and oversight of politicians, the Public Sector and the major management consulting firms. For further insights into my views, I would recommend a read of a blog which I wrote last year entitled:

      UK Local Authorities and Shared Services: Cost-Cutting – Myth or Reality?

      The earlier blog highlights how management consultants’ financial models are widely deployed out of context, blurring assumptions, risk management, governance and accountability.

      Anyway, let me know if you have further views on the points that I raise in the blog.

      Alf

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