UCL News


Union attacks boast of PFI successes

8 November 2005

Treasury claims that private finance initiative projects outperform conventional procurement by being built on time and to budget are "built on sand", Unison, the public sector union, claimed yesterday.

The Treasury has argued that PFI turned around the performance of conventional procurement. It said more than 80 per cent of PFI schemes were delivered on time and to the price the public sector had agreed, against a past record of 73 per cent of non-PFI projects running over budget and 70 per cent being delivered late.

But, according to a report produced by a team lead by Allyson Pollock, professor of health policy at UCL, and a noted opponent of the private finance initiative, the claim is not built on sound evidence. The Treasury, she said, cited five studies to support its contention, including two reports from the National Audit Office. But Prof Pollock said the Treasury had refused repeated requests to release the underlying data to its own 2002 study. As a result "the study cannot be evaluated", she said.

The two NAO reports involved interviews with the construction industry and reports from the managers of 38 PFI projects, with neither directly comparing performance under different methods of procurement.

A fourth report again did not provide the underlying data, while a frequently cited study by Mott MacDonald had just 11 PFI schemes in its sample against 39 non-PFI schemes, many of which were built years earlier.

Prof Pollock argued that the "ideal" way to evaluate cost and time over-runs would be to run a random controlled trial where identical projects were commissioned, with some built under conventional procurement and others under PFI. That, however, is not an approach that any government is likely to be able, in practice, to adopt.

Failing that, she said, retrospective studies needed to be larger, with projects more carefully matched to make them comparable. The Treasury rejected the findings, saying NAO reports had repeatedly shown that in the past public procurement suffered significant cost overruns and delays. "The authors of this report offer no evidence to show that PFI is not delivering, or that conventional procurement would be more effective."

Dave Prentis, general secretary of Unison, argued that the report further discredited the PFI and "is further evidence that we need a full independent inquiry into PFI".
Nicholas Timmins, 'Financial Times', 23 October 2005