HC Deb 23 April 1996 vol 276 cc68-9W
Mr. Congdon

To ask the Secretary of State for the Environment when he expects to make a formal response to the construction industry's paper of October 1995 about the private finance initiative; and if he will make a statement. [26785]

Mr. Robert B. Jones

The Government have taken the industry's views into account in reviewing the PFI and deciding what further improvements to make to its operation. My right hon. Friend the Secretary of State and I and other Ministers met a construction industry delegation today and provided a full response to the points raised in the report.

Actions taken by the Government to deal with these points include:

  1. (a) better guidance: a practical PFI handbook "Private Opportunity, Public Benefit" was published by HM Treasury in November 1995. Further guidance notes and practical case studies will be published during 1996;
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  2. (b) new procurement guidelines for Government Departments: highlighting best practice, published by HM Treasury on 3 April 1996;
  3. (c) model contract clauses: will be produced, for whenever it makes sense to use them, to minimise the need to reinvent the wheel for each PFI project. The Treasury is also to establish a standing committee to resolve precedent-setting contractual issues at an early stage;
  4. (d) large-scale PEI training: arrangements are being made to give practical training to 5,000 to 10,000 civil servants in 1996–97. The programme of training has commenced, and is open to private sector delegates;
  5. (e) more effective co-ordination: the Treasury private finance unit and the private finance panel executive have been strengthened;
  6. (f) closer dialogue with the construction industry: my right hon. Friend the Secretary of State chaired a PFI meeting with industry representatives on 22 November 1995, with Ministers from five Departments present, including the Financial Secretary to the Treasury. Today's is the second such meeting, and bilateral meetings between the industry and Ministers in a number of Departments are taking place;
  7. (g) encouragement for equity investment: the private finance panel will continue to strengthen its dialogue with funding institutions, building on the positive response the market is already making;
  8. (h) removal of unnecessarily restrictive contract conditions: to encourage greater flexibility in project funding;
  9. (i) developing the potential for smaller PFI projects: the emergence of model projects and contract documentation will assist the development of smaller projects. Other methods to bundle together smaller projects are also being considered;
  10. (j) regional PFI contacts: Government offices for the regions have established PFI co-ordinators and contact points.

The operation of PFI will be kept under review and further action taken where necessary to remove obstacles to the quick and successful implementation of projects.