Finance Committee

Inquiry into Public Private Partnerships

Further Evidence From Wales TUC Cymru following the Finance Committee Evidence Session on Thursday 10 April 2008 (FIN(3)-06-08)

2.2 The WTUC agreed to provide a note for the Committee detailing the 'assumptions’ referred to in its evidence (page 3) which said that (the PSC) "often has built in assumptions that favour the privately funded scheme”

PFI schemes have to be compared with a public sector comparator (PSC) to show they deliver value for money. As the comparison is theoretical, its outcome depends on what assumptions are built into the process. Assumptions which seem to favour PFI include only the private sector having the ability to modernise services. There is also evidence that the exercise has been manipulated in some schemes in order to advantage the PFI option, for example PSCs often make assumptions about future efficiency savings that are not borne out by hard evidence.

In most cases, the public sector body will be aware that there is no alternative to PFI for major investment. There is a clear incentive therefore to show that a PFI scheme will represent value for money.

(LGIU Critique of PFI/PPP for GMB)

2.3 The WTUC agreed to provide a note for the Committee detailing the evidence behind the statement (Page 4) "There is evidence, however, of major problems and service failure following externalisation, particularly in the outsourcing of benefit services.”

The ombudsman recorded 1,669 complaints about housing benefit administration in London in 1999/2000, with 65 per cent coming from the residents of four councils - Lambeth, Hackney, Islington and Southwark - that had all externalised their service. There have been similar failures with central government ICT externalisations, to such an extent that the government no longer uses PFI as a procurement mechanism for ICT schemes.

(LGIU Critique of PFI/PPP for GMB)

2.4 The WTUC agreed to provide a note for the Committee supporting the statement in its evidence (Page 4 - "The experience of Staff”) that staff have suffered as a result of being transferred into the private sector.

Please see the UNISON 2003 report about staff experience, the PFI EXPERIENCE - Voices from the Frontline particularly Working Conditions and Two-tier Workforce at the following link below:

http://www.secteurpublic.info/MGACMS-Client/Protected/File/P5CF5Z485G9SSN536TC2PBRDUHG775.pdf