PFI contract changes poorly managed

2 September 2008
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03 September 2008 | Jake Kanter

Many public sector organisations are "not doing a good job" of managing PFI contracts, according to a group of MPs.

The Public Accounts Committee (PAC) found PFI deals were "under-managed" and did not always achieve best value for money. The group looked at some of the major changes to projects during 2006 and found many were not competitively tendered.

As much as £180 million was spent on altering existing deals, 90 per cent of which were large changes costing more than £100,000. The report said 27 per cent of these large changes, such as building additional prison accommodation on an existing site, were awarded without a competitive tender.

Edward Leigh MP, chairman of the committee, said: "The evidence is that many public sector authorities are not doing a good job of managing operational PFI deals. Many contract managers do not have enough commercial expertise and the management of the contract is frequently not sufficiently resourced."

The PAC recommended the Treasury introduce training programmes for contract managers in the wider public sector, to support them when changes need to be made to contracts. It added competitive tendering should be applied to work "wherever possible".

SMsep2008

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