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Risky business

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ASTRAGAL

The knives are out for the Private Finance Initiative, that dream ticket of public and private sector partnerships, impeccably Eganite in theory, which constitutes public sector off-balance-sheet funding (sort of ).

'Widening scandal hits PFI, ' shouted an Observer news headline last Sunday.The paper had a good follow-up feature headed 'PFI's bounty hunters - firms developing schools and prisons pocket millions as the risk factor dwindles'.

The Observer noted that providers of facilities are renegotiating their loan agreements in order to make more profit after the buildings have been completed.

This would not in itself be shocking, were it not for the fact that design is being crucified on the cross of PFI procurement, so that the said developers and/or contractors can minimise risk associated with the building (ie, what users will actually experience) and concentrate instead on cash flow and securitisation down the line.

There is a big political argument here that is not going to go away, especially if dumb Tories realise the votes that might lie in attacking the government over substandard PFI buildings.

One hears stories of new schools that are so flimsy that ironmongery goes straight through the walls when a door is opened too vigorously, and of daylight standards that fail to meet the Department for Education guidelines.

So, who is doing the checking?

The answer is the same authorities that are giving soft permissions for secondrate schemes because they are all part of the same happy municipal family.This one will run and run.

Meanwhile, for PFI aficionados, don't miss the IPPR report Building Better Partnerships , recently published.

The key conclusion seems to be that there should not be a monoculture of public procurement routes.

PFI may be the answer some of the time, but it will not be all of the time.

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