PFI: National Audit

M25There has been a very damning National Audit Report on the M25 widening scheme. It's not the first PFI project that has come under fire, the Royal Liverpool University hospital PFI is currently being delayed.

What's this all about? It seems that the argument over value for money has gone awry. PFI schemes were the preferred method as they were more likely to come in on time and within budget. They also allowed government to spread the up-front cost over a much bigger timeframe.

Why the change of perspective? The review states that the M25 scheme showed 7.5% of the capital cost was spent on consultants. In addition, many deals were done during the "credit-crunch" and this has caused the skewed view of the finances.

What's the good news? Well they are currently reviewing how these PFI schemes are packaged. The funding will be more complex with many sources used on any one scheme, making the PFI part public-sector and part variety of other sources.

-- Click to read the full article from Issue 47 of Building Magazine

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