UK Audit Commission slams PFIs

Public condemnation of the UK government-backed Private Finance Initiative (PFI) increased yesterday as the Audit Commission published a report criticising the scheme.

PFI was first introduced by the last Conservative government as a way to get private industry to fund public sector projects. Since then many IT companies have been involved in PFI projects.

The Audit Commission report recognises the potential of PFI as a funding stream, but notes that it ties up large amounts of public money for many decades. It urged public authorities to rigorously assess all PFI deals.

The report is the latest in a wave of criticism of PFI. Organisations as diverse as BT, the Sema Group and the TUC (Trades Union Congress) have all voiced their concern over the scheme.

Despite having its critics, Bob Griffith, national secretary of the Society of IT Managers, claims a rejection of PFI by the Treasury would be shutting the stable door after the horse had bolted. "As far as IT is concerned, PFI is not as big an issue as it used to be because there isn't the level of spending anymore to make projects appropriate for it," he said. "At the moment, public authorities can get better rates than the private sector, so that is going to impact on the number of PFI schemes."

Griffith rejected the view that public authorities needed to be told to "rigorously assess" their PFI deals. "We've got some astute people looking after the finances in local authorities," he said. "But they may have no choice, especially if the government requires some sort of massive investment in say healthcare or education, but is not giving out the capital investment."

For this reason, Griffith thinks that however much opposition the PFI gets, the government will continue to support it. "The Treasury is holding the purse strings, but other government departments have still got big spending commitments," he said.