§ The Chief Secretary to the Treasury (Mr. Paul Boateng)The Treasury has today published the document "PFI: Meeting the Investment Challenge". Copies are available in the Vote Office and the Library of the House. The Government's objective is to deliver world-class public services. To achieve this, sustained increase in investment and matching reforms are needed to deliver efficient and responsive public services. PFI has an important role to play in delivering this investment. The Government have already significantly increased investment to schools, hospitals, public transport and other public services—total investment in public services now stands at over £40 billion, up from £23 billion in 1997, and it will continue to rise to over £48 billion in 2005–06. While the overwhelming majority of public investment—over 85 per cent—is funded conventionally, PFI has an important role to play in delivering investment in public services.
21WSThe document gives a detailed picture of the role of PFI in delivering this investment and presents a rigorous examination of the performance of PFI based on the evidence drawn from research by Her Majesty's Treasury and other bodies, in particular the National Audit Office. This evidence shows that, where it is properly used, PFI has delivered better infrastructure, on time, on budget and to a high standard throughout its life. Of the projects studied almost 90 per cent. were completed on time, and in every case the public sector has paid what it expected to pay. The document also reaffirms the Government's commitment that value for money in PFI projects should not be obtained at the expense of employees' terms and conditions. Drawing on the evidence presented, the document also outlines a series of measures designed to ensure that the public sector effectively captures the value for money benefits that PFI can deliver:
reforms to improve the assessment of value for money appraisal by the public sector, to continue to ensure there is no bias in favour of any one procurement option and the decisions are made on the basis of best value for money. These include reforms to the Public Sector Comparator to ensure consistency with the reforms made at last year's revision of the "Green Book" (the Treasury's guidance to departments on project appraisal). These changes mean that a value for money assessment of both PFI and conventional procurement options are fully taken into account prior to the procurement of a project, and that there is greater clarity on transferring soft services staff to ensure that application of value for money does not come at the expense of employee terms and conditions;measures to improve the efficiency of the procurement process, including more rigorous enforcement of standardisation, the accreditation of advisers, new models of procurement and greater transparency;proposals to revise the scope of PFI and focus its use on where it works best—exploring new applications for PFI where existing evidence suggests it could deliver benefits—as foreshadowed in the Chancellor's Social Market Foundation speech earlier this year—in social housing, urban regeneration and waste, but using conventional procurement methods in areas such as IT and small value projects where experience suggests that conventional methods are the best approach for driving more efficient procurement; andinvestigating the potential for new methods of financing projects, for example, through "framework funding" for small PFI schemes bundled together and by piloting the potential for using credit guarantees as an additional means of funding PFI projects.With over 600 facilities, including 34 major hospitals and over 200 schools, now in operation, and good levels of satisfaction with their performance, this document demonstrates that an intelligent and productive partnership with the private sector can deliver high quality public infrastructure. The reforms set out in the document will help strengthen this partnership for the future.