Taylor to head inquiry into public-private ventures

A NEW commission on the future of public-private partnerships will be launched today, headed by Martin Taylor, the former chief executive of Barclays Bank.

It will be the third significant commission of inquiry run by the Institute for Public Policy Research, the left-leaning think tank. The two previous ones, the social justice commission and commission on British business, played an important role in shaping government policy.

The task of the new inquiry is ambitious: to spell out the future funding and provision of public services. It will seek to fill the vacuum left by earlier policies, both old Labour nationalisation and Tory privatisation.

Mr Taylor said: "Despite significant changes in the public and private sectors, there still remains widespread misunderstanding and mutual suspicion between them." The public sector was still widely seen as inefficient, he said, yet on the other hand many Labour supporters had a "visceral" dislike of the private sector.

The initiative comes amid growing controversy about the public finance initiative.

PFI projects are proving to be politically fraught and some, such as the future of the London Underground ahead of the mayoral election, could spill over into electoral results.

The PFI is due to bring in pounds 3.8bn of private capital this financial year, while estimated government payments under the PFI will be pounds 1.5bn, rising to pounds 3.6bn in five years' time. In July the government also announced the creation of a new private sector-led body, Partnerships UK, to improve public-private partnership. This followed an assessment of the PFI by as taskforce led by Sir Malcolm Bates, chairman of Pearl.

Mr Taylor said: "Whereas privatisation was based on a simple concept that was easily explainable both to the policy community and the electorate, public-private partnerships tend to be confusing and come in all shapes and sizes."

The commission will look at which services should continue to be provided by the public sector rather than the private, but also at whether private finance provides good value for money.

One of the frequent criticisms of complex private finance deals is that they end up costing the taxpayer far more than the public sector provision they replace. However, public sector projects also often overrun on costs but have been less open to scrutiny.

Alan Milburn, Chief Secretary to the Treasury, will launch the initiative this afternoon. The government will not necessarily accept its findings, but will find them hard to ignore.

Mr Taylor was also head of the Government's tax and benefit taskforce, whose reports helped shape key policies such as national insurance reform and the new Working Families Tax Credit.

The 15 members include representatives from business, unions, the public and voluntary sector and academics. The final report will be published in early 2001.