Treasury opens way for pounds 7bn PFI projects

THE PAYMASTER General, Geoffrey Robinson, yesterday opened the door to a massive injection of private funds into public projects when he said he wanted to see pounds 7bn worth of Private Finance Initiative (PFI) schemes in the next two years.

Mr Robinson underlined the pledge by unveiling 30 projects, totalling pounds 4.25bn, which are to be given special priority under the PFI, the government scheme to encourage private investment in public infrastructure works. He also said that trade unions are to be consulted by public sector bodies when private sector contracts are chosen for PFI contracts.

The Paymaster General, a close ally of Chancellor Gordon Brown, said the PFI was set to gather speed up to the Millennium as more projects came on stream. "We think that pounds 5bn to pounds 7bn [of projects] will be a good target," he said.

The figure would be a sharp increase: in six years since the PFI's launch, projects worth about pounds 11bn have been signed.

Treasury officials said hospitals would account for around pounds 1bn of projects. Schools are expected to feature prominently under the PFI, which requires private firms to build and manage schemes in return for a yearly rent from a government department or local authority.

The Treasury yesterday backed 30 "significant" projects. The schemes, which include hospitals in Newcastle, Dudley, West Berkshire and Manchester and schools in Sheffield and Cornwall, are to receive special help from the Treasury' s PFI Taskforce.

Mr Robinson denied that rules allowing unions to be consulted on the suitability of private bidders would hold up the process. Bidders could be required to submit their recent "employment track record", including wages paid, health and safety checks and training.