Shake-up for Private Finance Initiative

Click to follow
The Independent Online
The Private Finance Panel is expected to be abolished today by the Government as part of a sweeping overhaul of the way public projects are funded through the Private Finance Initiative.

Geoffrey Robinson, the Paymaster General, will announce the changes following a month-long review of the PFI carried out by Malcolm Bates, former deputy managing director of GEC. Other changes are expected to involve a reorganisation of the Private Finance Executive and a strengthening of the private finance units operating within individual government departments.

Mr Robinson sacked Alastair Ross Goobey, the chairman of the Private Finance Panel, when he launched the review in May.

Now the remainder of the 10-strong panel is expected to be disbanded and responsibility for the initiative shifted to a public-private taskforce set up within the Treasury and reporting direct to Mr Robinson.

The aim of the review was to speed up the flow of PFI projects which are targeted to reach pounds 14bn by the end of 1998-99. As a first step, Mr Robinson scrapped the rule whereby all Whitehall capital spending projects had to be tested against the PFI before being allowed to proceed. He has also announced a new focus on priority projects within government departments and new legislation to help deliver large hospital and local authority PFI projects.

The remit given to Mr Bates, now chairman of Premier Farnell and the insurance group Pearl, was to examine the roles of the Panel, the Executive and the new Treasury taskforce and tackle policy issues such as how to make it easier to do PFI deals. He reported his findings to Mr Robinson 10 days ago.

Mr Ross Goobey, chief executive of the pension fund manager Hermes, had been chairman of the Panel since May 1996. Other members of the panel include Neville Simms, chief executive of the construction company Tarmac, Murray Stuart, chairman of ScottishPower, and Steve Robson, a senior Treasury official. Its chief executive is David Steeds, previously corporate development director with Serco Group.

Although the universal testing rule has been abandoned, Mr Robinson made clear that departments could not expect any increase in their capital budgets.