Government seeks PFI improvement following criticism

21 April 2011

21 April 2011 | Lindsay Clark

The Treasury said it was learning lessons from current private finance initiative (PFI) projects and has a ‘savings pilot’ underway.

The comments follow reports that it is failing to ditch the procurement model.

Earlier this week, Channel 4 News reported that, despite the chancellor criticising PFI, the number of deals using the initiative under the current government was greater than in the final year of the previous government.

In response, the Treasury said all PFI projects were being considered in line with new guidance issued for major projects. “This will set an approvals and assurance plan for each project that is based on the value and risk associated with the project, so ensuring all projects receive a suitable level of scrutiny,” it said.

A spokesman added that the Treasury is running a savings pilot at Queen’s Hospital, Romford. “The PFI contract is being examined to identify ways of reducing ongoing costs in this contract. Lessons learned will be used to drive savings across the full portfolio of PFI contracts,” he said.

He also emphasised that PFI was one option among many for delivering infrastructure projects.

Channel 4 News said that the government was set to sign off more PFI deals in 2011 than the previous government had in its last full year of office. This was despite chancellor George Osborne saying that PFI was “discredited”, while he was in opposition.

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