CBI bosses leap to defence of PFI

Grant Prior 11 years ago

Britain’s bosses have backed the beleaguered Private Finance Initiative following a string of attacks on the funding model.

Spending watchdogs have recently criticised the cost of PFI schemes.

But the CBI hit back today saying private cash is vital to deliver new roads, hospitals and schools as public spending stalls.

A new CBI report, Building Strong Foundations: Financing UK Infrastructure, puts forward a package of measures to boost infrastructure investment through effective public-private partnerships.

And the authors want to see the Government publish a clear pipeline of major projects to attract investors.

Dr Neil Bentley, CBI Deputy Director-General, said: “Given the current state of the public finances, private finance must be an option if the public is to continue to access quality new schools, hospitals and other infrastructure at an affordable price.

“We want the Government to publish a clear, long-term pipeline of projects so that investors can have the confidence to put their money in the UK.

“Infrastructure spending also offers one of the biggest bangs for buck in terms of additional economic activity, so this is a chance to generate jobs, growth and build for the future.

“Thanks to the use of private finance and expertise, hundreds of hospitals, schools and homes have been built, with the vast majority delivered on time and on budget. But let’s be clear, private finance should only be used when it offers best value for money.

“PFI mustn’t be viewed as the solution on every occasion, but when it has been used effectively it has delivered huge improvements in the UK’s infrastructure.

“Businesses understand that the use of PFI must evolve and that we need to develop new ways to pay for our infrastructure. But ministers must stand up for the role that private finance has to play and decide sooner rather than later how to use it to best effect.”

Measures the CBI is calling for to boost infrastructure investment and ensure value for money include:

·         The Government should consult with industry to develop a range of standardised designs for infrastructure, including schools, hospitals and prisons.
·         The Government should introduce legislation to extend local authority borrowing powers to enable them to accelerate Tax Increment Funding schemes.
·         Facilities management services, such as cleaning, should be re-tendered regularly throughout the contract to ensure they deliver value for money.
·         The Cabinet Office needs to produce guidelines requiring contracting authorities to provide standardised data on service cost and quality to allow services to be benchmarked effectively.
·         The Government should set out a clear plan for future infrastructure to allow businesses and investors to invest with confidence, with a five-year outlook.
·         Planning reforms must focus on removing delays and uncertainties.
·         Contracting authorities should retain risks which are more cost effective being kept in-house. Insurance and energy services are examples of areas where economies of scale can lead to significant savings.
·         The Government should introduce a clear and simple payment mechanism to incentivise continual improvements in services.
·         The Cabinet Office should use lean procurement techniques and strip out bureaucracy for private-public partnership projects to maximise savings, as well as setting out clear timescales at the outset of each project.

Latest news

Materials giant CRH looks to sell contractor Farrans

More than 550 staff set to get new owner
1 day ago

West Yorkshire transport projects delayed to save £270m

Over 30 transport schemes to be placed on hold due to cost inflation budget pressure
7 hours ago

Decision on A1 Costain dualling job delayed for third time

Development consent decision for £260m Northumberland scheme put back a further 9 months
8 hours ago

Colas wins £140m Cheshire highways upkeep deal

Incumbent contractor Ringway will handover to Colas in April
8 hours ago

Skanska to lend staff cash

Contractor links-up with finance firm to offer affordable loans to employees
8 hours ago

Ilke Homes pulls off £100m record-breaking fund raise

Largest-ever capital raise by a UK modular house builder to fund expansion
1 day ago

Construction buyers fear for year ahead

"Construction companies now have a tightrope to walk in terms of being ready for recovery and cautious around investment"
1 day ago

Gove calls for competition probe into house building

Levelling Up and Regeneration Bill 'strengthened' with new measures
1 day ago

Schools get £500m for energy upgrades this winter

Extra cash found for better heating controls, insulation and energy efficient lighting
1 day ago

1,000-home North London scheme approved

Developer Hill will start work in the Spring on South Tottenham site
1 day ago

Bid race for £500m Suffolk construction framework

Construction and building services firms called up for East of England four year deal
1 day ago

Mace employs robot dog to avoid slip and trips in tunnel

Robot working in dark and hazardous conditions under Heathrow Airport
1 day ago

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
2 days ago

Former Galliard chief takes helm at Inland Homes

New CEO Don O'Sullivan sets out to return south east house builder to profitability
1 day ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
2 days ago

Industry veteran to head Henry Bros northern arm

Peter Commins, former Kier and Balfour Beatty northern chief, to spearhead growth drive
1 day ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
2 days ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
2 days ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
2 days ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
3 days ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
2 days ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
5 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
5 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
5 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
5 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
6 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
6 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
6 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
6 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
6 days ago

Contractor services