HC Deb 03 April 1996 vol 275 cc259-60W
Mr. Matthew Banks

To ask the Chancellor of the Exchequer what progress has been made towards agreeing private finance initiative projects in 1995–96; what steps he is taking to increase the number of private finance initiative contracts; and if he will make a statement. [25127]

Mr. Jack

The private finance initiative is now making a serious contribution to the delivery of services to the public. Within 12 months, the Government have agreed projects with a capital value of £4.8 billion. In addition, projects with a capital value of around £300 million are at preferred bidder stage. A further £330 million worth is expected to be agreed shortly. These are listed in the tables.

These figures tell only part of the story. The total value of a PFI deal to the private sector can typically be three times the capital value because the Government contract to buy services associated with an asset for years to come.

Through PFI, the Government have achieved more than many people ever thought possible, though agreeing this number of deals has not been without problems. I have published new procurement guidelines today which will be circulated throughout the public sector. They are a practical response to comments made by people active in PFI and are designed to help smooth out processes, reduce bidding costs and speed up the flow of good deals. I have placed a copy in the Library.

PFI offers prospects for the public and private sectors to work in partnership throughout the country. I am about to embark on a tour to promote PFI regionally and to hear directly from people active on PFI contracts.

From this solid base, the Government intend to go on to agree at least £14 billion worth of deals by the end of 1998–99. The PFI is unlocking new resources, producing a new range of investment opportunities and increasingly replacing more old-style public sector capital spending and service procurement.

Agreed private finance initiative projects
£ million
Home Office
Bridgend prison 50
Fazakerley prison 50
Immigration Nationality Department 20
Other Home Office projects 20
Channel tunnel rail link 3,000
Northern Line trains 400
Ist tranche design, build, finance and operate 380
Social Security
National insurance recording computer system 150
South Bucks district general hospital 40
St. James', Leeds 50
Royal Berks and Battle 20
Norwich and Norfolk district general hospital 170
Swindon and Marlborough 90
Smaller deals 70
RAF vehicle fleet in Germany 50
Other defence projects 55
Dundee district council: waste to energy 40
Hairmyres and Stonehouse NHS trust 60
Other Scottish health projects 20
University Hospital Wales 10
Waltham Forest housing action trust 15
Total value of agreed announced projects 4,760
Other hospital projects with identified preferred bidder but which have yet to be announced 300

Examples of imminent projects
Projects £million
Docklands Light Railway extension 120
Longbenton DSS: Newcastle site redevelopment 80
Benefit payments automation through Post Office 120
British museum support building 10
Total 330

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