[A-List] UK corporate state: PPPs here to stay

["Keaney Michael" <Michael.Keaney@xxxxxx>]

Union Canutes cannot halt PFI tide

Digby Jones
Monday September 30, 2002
The Guardian

No one can be insulated against change. Whether you work in the private,
voluntary or public sector, the world around you constantly evolves and
if you don't adapt to those changing demands and expectations you become
unemployable.

Trade unions' ideological opposition to private finance initiative (PFI)
projects is totally misguided. Anything which would cause a delay will
not prevent change.

Some union leaders may behave like latter day Canutes but they can't
hold back the tide of change. The pressure for improvement is now so
great that they risk being pounded by the impatient waves of public
satisfaction, and their members are tax-paying consumers of public
services too.

PFI underpins public service reforms. Without it the government's plans
for the NHS simply won't happen. Their 10-year plan promised more than
100 new hospital schemes between 2000 and 2010. Sixty-eight major
hospital development projects worth over £7.6bn have been given the
green light, with plans for a further 34 medium-sized hospitals also on
track. Nine new PFI hospitals are now open with 14 under construction -
all have opened on or ahead of time. The new Norfolk and Norwich was
completed 20 weeks early. Would you want your family treated in a poorly
equipped, decrepit Victorian hospital or in a new state of the art PFI
hospital? I know what I'd prefer.

By March 2004, PFI investment in schools will reach £3bn. Thirty new
rebuilt or extensively refurbished schools have been opened with a
plethora of other schemes, from single primary schools to education
authority-wide projects covering everything from catering to ICT. This
is clearly progress, but sadly the unions want to deny the country this
advance.

And if you don't believe the voice of business why not give the national
audit office the benefit of the doubt. When they put 121 PFI projects
under the spotlight in November 2001 they found that 81% of the
government bodies who had contracted out work thought that they were
achieving satisfactory or better value for money. Almost three-quarters
described their relationship with the contractor as good or very good.

I am not suggesting that business has got all the answers, just like
other parts of society, we make mistakes too. There is still a huge
amount of work to be done if the private sector is to make its
contribution to public service reform really count.

As the new cabinet secretary, Sir Andrew Turnbull, said when he launched
the delivery skills programme last week, the government's record on PFI
has been less than perfect. With the main area of weakness the early
stages of project commissioning, improvements in the tendering and
procurement process are essential. If the cost of tendering continues to
spiral, companies will turn their back on the process, competition will
be stifled and the stimulus for reform will be lost.

It is essential that the client knows what outputs they are seeking when
they enter into a contract, just as the contractor needs to have firm
goals so that their performance can be properly measured. If the client
keeps moving the goal posts or is more focused on inputs than the end
result all the taxpayer will get is own goals. We have all heard enough
stories of aborted new computer systems to last a lifetime.

The government must stand firm against union pressure, particularly from
the indulgent voices of the left. Moderates like John Monks have worked
tirelessly to create more quality jobs and all that is now being put at
risk by thoughtless, politically motivated rhetoric. Many more pain
barriers have to be passed through before there are noticeable
improvements in public services. The tax-paying, voting customer must
come first, not political ideology, power broking or vested interests.
Business will play its part, the government clearly is - now it is up to
the unions to put country first and do the same.

Digby Jones is the director-general of the CBI