Blair insists PFI plans offer value for money

Tony Blair was forced yesterday to defend his private finance initiative plans after critics protested that Enron's auditors, Andersen, championed the scheme in an influential report to Labour.

Unions and MPs claimed that Andersen's enthusiasm for the scheme was flawed because it stood to make large sums from PFI projects. Mr Blair has long relied on a report by Andersen claiming that PFI can save 17 per cent of the costs of similar projects in the public sector.

Speaking at Prime Minister's Question Time, Mr Blair insisted PFI deals provided value for money despite claims that the Andersen report was "fundamentally tainted".

But John Edmonds, general secretary of the GMB union, said: "If you are going to find out whether junk food does any harm to children, you don't go to McDonald's to get your answer. You go to someone independent." He said Andersen was involved in 37 PFI contracts worth more than £10bn and would have earned "scores of millions of pounds" from the schemes.

Annabelle Ewing, a Scottish National Party MP, challenged Mr Blair in the Commons to deny that "his flagship PFI policy has been holed beneath the water". He replied that both the National Audit Office and another consultancy firm, PricewaterhouseCoopers, had concluded that PFI provided good value for money.

Some 37 PFI schemes were underway in schools, 26 in higher and further education and 68 such contracts had been agreed for the National Health Service. "It is important that we carry on using the private sector to help lever in greater investment where that works," Mr Blair said.

Last night, John Ormerod, managing partner of Andersen in the UK, denied that the firm had any "political leanings" towards Labour and stressed that it had won its government contracts on merit after a tendering process.