Magazine article Public Finance

No Evidence That Private Funding Schemes Provide Value, Says NAO

Magazine article Public Finance

No Evidence That Private Funding Schemes Provide Value, Says NAO

Article excerpt

Ministers do not have strong evidence to show that private finance funding for building schemes offers the best value for money, auditors have warned.

In evidence prepared for a parliamentary inquiry, the National Audit Office said there were now more than 500 Private Finance Initiative projects in England. They have a capital value of more than £28bn, with other publicprivate partnerships adding £18bn.

But it warned: Our view is that private finance can deliver benefits, but it is not suitable at any price or in every circumstance.'

The warning comes as Wakefield Metropolitan District Council confirmed it will not sign off its £7 00 m waste disposal contract until next year.

The scheme was set to be the next major PFI deal, but the council has struggled to reach financial close since selecting preferred bidder VT Group in November 2007. Construction had been planned to begin in 2009.

Wakefield chief executive Joanne Roney told Public Finance that moving towards financial close had been 'a complex and challenging process in view of the economic climate'.

The NAO paper, produced for the Lords economic affairs committee, noted that 'assessing the pros and cons of alternative procurement routes is especially important in the recession'. …

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