Treasury 'rigged' reports into success of private finance projects

Gordon Brown has been accused of making false claims that his flagship scheme to secure private finance for public sector projects provides good value for money.

A study by the University of Edinburgh of the Treasury's statements about the success of the private finance initiative (PFI) found that the evidence for the claims to be "either non-existent or false".

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The attack follows criticism by the Confederation of British Industry that the Treasury minister Ed Balls, a close Brown ally, misrepresented its stance on the Chancellor's 1997 decision to abolish the pension funds' right to reclaim the tax deducted from share dividends.

After a few days on the defensive, Mr Brown will try to regain the initiative today by announcing a £20m grant to the United Nations Children's Fund to help maintain schooling in war zones and fragile states where education systems have broken down. It is part of his campaign to secure free education for the 80 million children who cannot go to school. Speaking at a conference in Scotland, he will urge other G7 countries to meet the commitments they made to the developing world at the Gleneagles summit in 2005.

Researchers at Edinburgh investigated the Treasury's claim that 88 per cent of PFI projects were delivered on time and within budget while most publicly funded projects (70 per cent) are delivered late and 73 per cent cost more than expected.

Of the five studies cited by the Treasury, they found two were based on National Audit Office reports which concluded it was not possible to judge how the procurement method affected the results. A third contained no comparative data and a fourth was withheld by the Treasury on grounds of "commercial confidentiality". The fifth report "artificially inflated" the cost of traditional public projects, according to the Edinburgh study.

Professor Allyson Pollock, who heads the university's Centre for International Public Health Policy, said: "Government ministers have repeatedly justified the controversial PFI policy in terms of its greater efficiency and value for money savings compared with traditional methods of public investment. It would appear that comparisons are rigged in favour of PFI and that Treasury policy is not evidence-based."

A Treasury spokesman said: "The independent National Audit Office, not the Treasury, reported on the effectiveness of PFI projects, and it is they who state that PFI gives 'greater certainty'. The Government remains committed to investing in our public services and infrastructure to overcome a historic legacy of underinvestment, and PFI will continue to be used to deliver a small but important part of this investment, where it is shown to be value for money for taxpayers to do so."

A Treasury source added yesterday: "Anyone saying there is no evidence for using PFI obviously hasn't read the NAO's independent reports on the subject."

* Lord Winston, the fertility expert and Labour peer, accused Mr Brown of being "two faced" about a cut in funding for scientific research, which he said was a "shocking blow" and "blot" on the Chancellor's record. Mr Brown announced a 25 per cent increase in spending on science to 2011 in last month's Budget, but this followed an earlier announcement that £68m was being cut from the budgets of science research councils.