Industry backs PFI plan

The Confederation of British Industry has strongly backed the Government's plans to review and reform the much-criticised private finance initiative, a move which brings the policy agenda at the employers' organisation even closer to Labour.

In its response to the Government's 12-point plan to shake up the PFI, the CBI backed calls for the abolition of universal testing for state projects to assess their compatibility with the initiative, a Conservative policy widely blamed for delays to high-profile investment projects.

The CBI also supported suggestions that it would have a formal consultative role with the Treasury through joint working parties, a development it said would help to build consensus with the private sector.

Charles Cox, chairman of the CBI's public procurement and efficiency committee, said better project selection was now the top priority, along with clearer legal guidelines on the relationship between the public and private sectors.

Mr Cox said the biggest challenge was in the National Health Service, where many hospital building projects had become bogged down with unnecessary bureaucracy. He feared the same would happen with education and local government investments.