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New Welsh Assembly relegates PFI to second choice for procurement

The re-elected Welsh Labour Party has downgraded the controversial Private Finance Initiative, reasserting the primacy of traditional procurement. From now on PFI will be considered 'second choice' when the Welsh Assembly assesses how to fund new buildings.

And influential Labour assembly member Peter Law, a former NHS Trust chief executive, is calling for the new government to drop PFI altogether.

Welsh Labour policy advisor Adam Huggitt told the AJ the Principality has 'at least six new hospitals in the design stages' and 'all of them will be funded through purely public means'.

'We have asked ourselves what the best procurement method is for each project and we have found that in the vast majority of cases it is not PFI, ' he said. However, Huggitt insisted PFI is 'not dead altogether'. 'If PFI is the most appropriate method then we will consider using it, ' he added.

Former assembly minister Law commented:

'We do not need any more expensive PFI schemes in Wales which will cause financial havoc in the future. I would like to see the party commit itself to no more PFI schemes at all.'

Design Commission for Wales chairman Richard Parnaby said it is an open secret that the Welsh leadership is keen to put 'clear red water' between itself and New Labour in London. 'It is not surprising the assembly has done this, ' he said.

'There is a completely different agenda in Wales.'

However Cardiff-based Capita, number 10 in the AJ100 with one of the largest PFI portfolios in the UK, dismissed the move, claiming it was a backward step. 'If PFI is going to be considered a second option, with a preference for conventional funding, then the burden of cost for new schemes would surely fall on the public in terms of increased taxation and public sector borrowing, ' director Terry Barker said.

'A more worrying prospect is that without private funding the money may simply not be available for such schemes and Wales would end up with a second-class health service, ' he added.

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