Treasury must be vigilant over PFI financing, says MP
COMMENTING ON the Commons public accounts committee’s report on how the Treasury responded to the effect of the 2008 credit crunch on PFI projects, South Norfolk MP Richard Bacon, a member of the committee, said:
“The 2008 credit crunch had an enormous impact on public infrastructure projects. Banks had stopped lending, leaving the government unable to let any sizable Private Finance Initiative (PFI) contracts and putting the viability of infrastructure projects worth over £13 billion at risk.
“The Treasury should have explored alternatives to high bank charges in greater depth and should also have examined whether the 35 PFI contracts let at the height of the credit crunch still represented value for money, despite higher bank costs adding around £1 billion to the contract price.
“If PFI is going to be used to fund public infrastructure projects, then the Treasury will need to be more vigilant in future if it is to ensure that PFI financing provides value for money”.
9 December 2010
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PAC REPORT: