HC Deb 02 July 1996 vol 280 cc710-1
7. Mr. Hanson

To ask the Secretary of State for the Environment what contribution he estimates the private finance initiative will make to the capital programme of local authorities. [33938]

Mr. Robert B. Jones

The private finance initiative offers potential for significant additions to local authority capital investment in the coming years. That is why my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration announced on 21 May substantial changes to the local government capital finance regulations to facilitate the further development of the private finance initiative.

Mr. Hanson

Does the Minister accept that, in the absence of proper local capital spending programmes by central and local government, the private finance initiative is becoming increasingly attractive to many local authorities? Does he also accept that the 32 regulations are red tape that needs to be removed and that we need clear, open guidance for local authorities so that the backlog on the private finance initiative is made available? In future, local authorities must have a clearer idea of what the private finance initiative means.

Mr. Jones

I am glad that the hon. Gentleman welcomes the private finance initiative, and I hope that he will get that message across to some of his hon. Friends who still seem hostile to the idea of involving private sector capital.

Of course we want to make sure that there is no red tape. That is why my right hon. Friend has had three different tranches of measures to strip away the bureaucracy. We are prepared to look at any suggestions by local authorities about other areas that are worthy of examination.

Of course bureaucracy is a problem not just on the regulatory side. We have to ensure that local authorities, as clients, do not have fussy contract documents or overlong tender lists or other measures that would block a good package.

Ms Armstrong

The Minister's staggering complacency is almost beyond words. Has he not noticed that, in the past few weeks, the confidence of the private sector has virtually collapsed? The legal decision added to the regulatory regime have prompted it to say, certainly to us, that it has no confidence in the ability of the private finance initiative further to push capital development by local authorities. Will the hon. Gentleman therefore quickly review the position, because the construction industry and, more important, the public are suffering enormous losses as the necessary capital investment is simply not being made?

Mr. Jones

What we have witnessed is the staggering ignorance of the hon. Lady. If she talked to individual construction companies throughout the country that are involved in submitting projects and having them assessed, or met the construction industry on a national basis, as I do, she would know that they are enthusiastic about this and view it as the way forward.