OUTLOOK : Treasury gimmickry
Wednesday 25 January 1995
The delay in getting many PFI projects off the ground can be put firmly at the door of Treasury officials, whose ignorance of business and hostility to private finance would not be out of place on the left of the Labour Party.
On Monday the Building Employers' Confederation said it resented criticism that its members could do more to get involved in the PFI. The problem, said the BEC, was "trying to get through the treacle of government departments" whose officials seemed to be demanding that business operates to new investment rules.
Such views were in evidence yesterday at a conference marking the first year of the PFI. The Treasury, it seems, simply does not understand that investment risks must be matched by returns.
Genuine concerns exist about whether the PFI is really just an excuse for the Government to withdraw its support from public projects, many of them of great social need. Yet few people doubt that, in principle, the PFI can make a positive contribution towards improving investment in Britain's roads, hospitals and buildings without draining the public purse. The contract to be signed soon with GEC-Alsthom to provide and maintain trains for London Underground's dreaded Northern Line is heralded as the archetypal PFI deal.
Unfortunately, similar examples are hard to find, and the GEC deal was only secured after Sir Alastair Morton, chairman of the PFI panel, began making waves. He can hardly be expected to be around to broker all the deals.
What is needed is a cultural change at the Treasury, where the dogma still exists that the private sector is only intent on screwing the taxpayer. This, despite the evidence of successful privatisations. Some Treasury officials no doubted hoped to bury the initiative in bureaucracy. Mr Clarke's restatement of his enthusiasm for the PFI yesterday should go along way to dispelling any such notion.
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