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The Treasury plans to start scrutinising the many PFI contracts it has inherited, beginning with an exercise on the Queen’s Hospital in Romford to refine its guidance. There is risk this approach will lead to trench warfare, enriching armies of lawyers and accountants on both sides and saving little, if anything. The legal profession is already gearing up for this .
Why not outflank them and be serious about transparency?
Many of the most egregious PFI contracts are unprofitable, or would be if enforced. Public scrutiny would identify a multitude of ways of incrementally improving quality of service and removing overheads that could add shareholder value at the same time as cutting public costs.
The task is to enable simple and obvious changes to be agreed – whether or not there is a more fundamental contract review. We need a “Big Society” approach, involving those who know the realities of delivery and wish to see results, not behind closed doors negotiations between teams whose members are paid by the day, week, month or year.
Success also entails using the technique described in my blog entry on “Turning inflexible and toxic outsourcing contracts into win-win partnerhsips“.
Order that all PFI contracts be put online to enable taxpayers to assist, using the draft Treasury guidance “Making savings in Operational PFI Contracts” and the wealth of other Treasury Material as a start point.
Then benchmark the result of the Romford review with those on what could/should be done to turn round, for example, the PFI for the Princess Royal Hospital in Bromley. Then there are all those schools PFIs let alone those, like the Tube Lines and London Fire Brigade, where …
I will stop before I get too depressed.