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Livingstone backs £110bn London PFI programme

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Mayor Ken Livingstone has backed a massive £110 billion Private Finance Initiative (PFI) investment programme proposed for London's public services.

'Invest in success' - written by London First, a lobby group for the capital's main business interests - outlines the proposed boost in funding. It claims that if current levels of economic growth are to continue, a huge cash injection is required in public sector infrastructure. The report also highlights a projected population growth of more than 700,000 in the next 15 years, stressing that the public sector in its present state will not be able to keep up.

If the plan goes ahead it will see the biggest programme of investment in public sector construction in the capital's history.

The news comes at a time when the profession is debating whether it has the capacity to deal with the present projected growth in infrastructure spending, following an address by RIBA president Paul Hyett at the RIBA conference. He claimed that the profession was not ready to deal with the work due to the small average size of practices.

Many architects are opposed to the PFI because they see the procurement method as reducing the influence of architects and the importance of design.

However, London First argues - and Livingstone agrees - that there is no real funding alternative.

The only way to find the money, the report claims, is to use partnerships with private industry as 'there is no way London's business could afford the taxes that would be needed if it were funded by the public purse alone'.

It states: 'At the most visible level, planners, architects, engineers, designers and builders will need to be brought in and managed. Managed by the private sector in a series of partnerships, it can free up public sector managers to focus on core service provision.'

The mayor was set to give the plan his backing on Wednesday, for the first time actively supporting PFI investment. The GLA claimed that Livingstone is set to say that he has never been opposed to 'private sector involvement on the public services'.

He was also set to tell a group of London First representatives assembled for the launch that he understands that - apart from on the Underground - the PFI is the only way the funding can be found.

'The fundamental reality is that the huge scale of investment London requires can only be delivered when the public and private sectors work together, ' he said.

CABE partnership coordinator Stephen King warned that PFI projects need to be watched carefully. 'If there is to be this sudden growth in investment, ' King stressed, 'we need to ensure that the message gets to clients that if the design or the design team are not acceptable, then they could and should put projects out to tender again.'

But he added: 'Some practices are changing from associates to partnerships because the change in status allows them to borrow more money to help them get involved with the projects.'

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