[A-List] UK corporate state: PPPs in disarray

[Michael Keaney]

Mandelson's influence at the Independent is working. That's one plausible
explanation of how its political editor, supposedly an expert, is able to
claim that the IPPR's ambivalent report on PPPs hurts Gordon Brown more than
Blair. Of late Gordon and his sidekick Ed Balls have been arguing very
publicly against "unnecessary" privatisation against the ultras inside the
cabinet who are associated with Blair and who want to privatise everything
in sight. Blair camouflages this with crap about "whatever works, I'm not
dogmatic", but he's at least as guilty as Brown of privatising the state
sector beyond Thatcherites' wildest dreams.

Elsewhere the Independent is playing up the difficulties caused by the IMF
for Brown. At a time when Blair and his missus are reeling from sleaze
allegations surrounding the truly despicable FACT of their speculations on
the property market at a time when there is a housing shortage UK-wide, one
can only hope Peter and his friends (Aaronovitch et al.) will get their just
desserts. Peter certainly knows about property deals, having done a private
finance initiative of his own with Geoffrey Robinson, the man who made
millions working with Robert Maxwell.

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Key study casts doubt on flagship scheme for schools and hospitals
By Andrew Grice, Political Editor
The Independent, 10 December 2002

There is no evidence that the Government's flagship scheme to enhance the
private sector's role in schools and hospitals has provided better value for
money, a report published today reveals.

The Institute for Public Policy Research think-tank (IPPR), which has
completed a huge study of the Private Finance Initiative (PFI), found that
the programme gave taxpayers better value on roads and prison building but
that schools and hospital projects were "much less impressive".

Although the Government insists that PFI is working, the criticism will
embarrass ministers and the Chancellor, Gordon Brown, who has staked much on
the scheme's success. The institute has close links with Downing Street and
blazed a trail for the private sector playing a bigger role in public
services. It now fears that the wider programme of public-private
partnerships, which it supports, is being undermined by problems with PFI
building projects.

The research uncovered evidence that public-sector managers felt pressurised
into using the scheme because they believed it was the only way to win
government approval for their projects.

Despite government claims that the programme is closely monitored, the study
found that, out of 378 PFI projects completed by central and local
government, only 23 had been given any independent evaluation by official
audit bodies.

The institute backs calls by trade unions for an independent financial
review of the PFI. This was approved by the Labour Party conference in
October, but unions and party activists fear it has been ignored.

Paul Maltby, an IPPR research fellow and the report's author, said: "In
theory, the PFI can deliver better quality services at less cost to the
taxpayer, but in sectors such as health and education these expected
benefits are in doubt. There is currently no evidence about whether the PFI
delivers in practice. The Government needs to commission an independent
review of the PFI."

A Treasury spokesman said last night: "The decision to use PFI is only made
after a stringent assessment of whether it offers better value for money
than the traditionally procured alternative."