Clarke pledges reform of PFI bidding process
The Government attempted to head off private sector criticism of the private finance initiative this week with a set of measures designed to cut red tape and the spiralling costs of bidding for public sector projects.
The Chancellor, Kenneth Clarke, told the annual conference of the private finance panel that the Treasury had responded to comments made by the Confederation of British Industry with a series of standard terms and conditions he expected to be in ‘good PFI contracts’.
But he refused to set overall targets for spending on PFI contracts.
‘There will be no going back to “Treasury knows best”. We are in the business of guidance, not prescription.’
Clarke also rejected demands made by some contractors for the Government to reimburse bidding costs. ‘That may look like a pump-priming measure.
But rarely, in my view, would it be a justified use of taxpayers’ money.’
The CBI, which has formed an alliance with the Treasury to breathe new life into the initiative, continued to warn the Government not to use it to cut public spending. The Government is set to fall short of its #1.9bn target for PFI deals this year.
Speaking at the same conference, KPMG partner and panel executive member Dame Sheila Masters repeated her claim that public sector bodies should use accountants early in the project to test the viability of PFI schemes.
