§ Mr. TimmsTo ask the Chancellor of the Exchequer if he will report the Government's response to Mr. Malcolm Bates's review of the Private Finance Initiative; and if he will make a statement. [5392]
§ Mr. Geoffrey RobinsonI am today placing in the Members' Library a summary of the Bates review and a list of all its recommendations. It is a thorough piece of work for which the Government is most grateful. It builds upon the 12 Point Plan for Partnership originally published in the Labour Policy's Business Manifesto.
The Government promised to re-invigorate the PFI and that is what we have done. Malcolm Bates has applied a businessman's mind to this policy and produced specific recommendations which we accept in full as an agenda for action.
The review says that the PFI can secure improved value for money when handled well. But the public sector structure must be simplified and responsibilities made entirely clear.
345WDepartments and agencies must be accountable for their own procurement decisions. However, it identifies a temporary need for a strong central input to help ensure delivery of quality transactions that provide a sound basis for future business.
To meet this need, we will, as recommended, create a new Treasury Private Finance Taskforce—combining central project and policy expertise. Its Chief Executive on the projects side will report direct to me. We will make an appointment in due course.
This individual will focus on the quality of PFI transactions. He will be supported by 6–8 Executives from the private sector with direct project management experience and financial skills. Until now, the Treasury has been involved too late in the process, leading to frustration and increased costs. The Taskforce will help central government departments and agencies road-test significant projects for their commercial viability before procurement begins.
The Taskforce's policy side will also have its hands full. The review includes specific recommendations to produce rapidly more standardised documentation for key stages of the procurement process. The Government wants greater certainty wherever it can be provided to help reduce bidding costs.
The Private Finance Panel will be stood down. I have written to all members today thanking them for their past contribution. The review acknowledges the immense value that high calibre members made in freely giving their time to meet key players, speak at conferences, write articles and support a growing band of Executives. However, it concluded that their on-going role was unclear and that there was a need to simplify organisational structures.
The recommendation to strengthen departmental Private Finance Units alongside the new Treasury Taskforce also takes away the need for the Private Finance Panel Executive. The Government accepts the Review recommendation that it should be disbanded by the end of September. Opportunities will, of course, exist within the new structure for those individuals currently with the Executive who have the skills and experience now required.
The agenda for action is detailed, practical and full of common sense. It will be welcomed as long overdue by companies and departments who have struggled for two long under previous management.