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PFI bosses attacked over charges Watchdog exposes PFI charges gap
(about 4 hours later)
Public-private partnership bosses have been criticised after a watchdog found big discrepancies in the prices being paid for changes to projects. A watchdog has found significant differences in the prices being charged for work at schools and hospitals built under the private finance initiative.
The National Audit Office found the amount spent on installing plug sockets in private finance initiative buildings ranged from £30.81 to £302.30. The National Audit Office, which monitors public spending, found the amount spent on installing plug sockets ranged from £30.81 to £302.30.
One contractor put up a notice board for free, but another charged £149.71.One contractor put up a notice board for free, but another charged £149.71.
Edward Leigh, chairman of the Commons public accounts committee, said PFI bosses needed to get "street wise".Edward Leigh, chairman of the Commons public accounts committee, said PFI bosses needed to get "street wise".
Changes to PFI projects should not be costing voters "an arm and a leg", said the Tory MP.Changes to PFI projects should not be costing voters "an arm and a leg", said the Tory MP.
The public sector has allowed itself to be taken for a ride Edward LeighPublic Accounts CommitteeThe public sector has allowed itself to be taken for a ride Edward LeighPublic Accounts Committee
The benchmark figure suggested by the Royal Institute of Chartered Surveyors for installing an electrical socket is between £51 and £103.The benchmark figure suggested by the Royal Institute of Chartered Surveyors for installing an electrical socket is between £51 and £103.
The report by the NAO - the official Whitehall spending watchdog - found that a lock could cost anything from £15.09 to £486.54, while the cost of a key ranged from £4.26 to £47.48.The report by the NAO - the official Whitehall spending watchdog - found that a lock could cost anything from £15.09 to £486.54, while the cost of a key ranged from £4.26 to £47.48.
In total, Whitehall departments and other public bodies spent more than £180m on changes to operational PFI projects in 2006.In total, Whitehall departments and other public bodies spent more than £180m on changes to operational PFI projects in 2006.
On the bill was £300,000 spent by the Home Office on installing 300 new desks, and £104,000 spent by HM Revenue and Customs for a "space planning facility" to reconfigure the layout of its offices in Whitehall.On the bill was £300,000 spent by the Home Office on installing 300 new desks, and £104,000 spent by HM Revenue and Customs for a "space planning facility" to reconfigure the layout of its offices in Whitehall.
The NAO said that very often officials had not checked out the best deal for the taxpayer.The NAO said that very often officials had not checked out the best deal for the taxpayer.
Mr Leigh said: "Public sector contract managers must be a lot more street-wise.Mr Leigh said: "Public sector contract managers must be a lot more street-wise.
"For all changes, they must be eagle-eyed that the contractor is not charging inappropriately high fees.""For all changes, they must be eagle-eyed that the contractor is not charging inappropriately high fees."
COSTS OF PFI CHANGES Electrical socket: Highest - £302.30, Wirral Schools; Lowest - £30.81, Kirklees SchoolsSupplying and fitting a data point: Highest - £398.30, Blackburn Hospital; Lowest - £95.74, East Ridings SchoolFitting a notice board: Highest - £149.71, Calderdale Royal Hospital; Lowest - Nil, Defra offices, CambridgeCOSTS OF PFI CHANGES Electrical socket: Highest - £302.30, Wirral Schools; Lowest - £30.81, Kirklees SchoolsSupplying and fitting a data point: Highest - £398.30, Blackburn Hospital; Lowest - £95.74, East Ridings SchoolFitting a notice board: Highest - £149.71, Calderdale Royal Hospital; Lowest - Nil, Defra offices, Cambridge
He added: "The public sector has allowed itself to be taken for a ride.He added: "The public sector has allowed itself to be taken for a ride.
"Public sector contract managers for PFI deals have insufficient commercial expertise to negotiate with and develop effective relationships with their private sector counterparts.""Public sector contract managers for PFI deals have insufficient commercial expertise to negotiate with and develop effective relationships with their private sector counterparts."
The Treasury insisted that it had recently put out new guidance to ensure that full value for money was obtained when changes were made, both for new contracts and existing contracts.The Treasury insisted that it had recently put out new guidance to ensure that full value for money was obtained when changes were made, both for new contracts and existing contracts.
Philip Hammond, Tory shadow chief secretary to the Treasury, said: "Public support for PFI projects depends on proper management of projects and demonstrating value for money for the taxpayer.Philip Hammond, Tory shadow chief secretary to the Treasury, said: "Public support for PFI projects depends on proper management of projects and demonstrating value for money for the taxpayer.
"The government is manifestly failing to achieve either of these things.""The government is manifestly failing to achieve either of these things."