[Closed] PFI chickens coming home to roost...

Yep, I thought that would happen.

Not sure how such a stupid idea ever went ahead, stupidity or massive backhanders involving huge brown envelopes and a few winks, nods etc.

But with losses forecast to top £60m this year

Under the last government the trust signed two huge private finance deals – which cost the hospital more than £61m in interest charges this year.

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The Great Genius strikes again.

Money you don't have is always the most expensive type to spend.

massive backhanders

It's a veritable industry in its own right.

gloat all you want, the problem is we are in the crap how do we get out. Do you see the tories telling the PFI consortia to take a hit? or will we just see cost cutting and the payments carrying on?

And why PFI, it is only borrowing if it is on balance sheet, leases aren't borrowing.

Do you see the tories telling the PFI consortia to take a hit?

They bludy should - if they have any spine. Screw the lawyers.

No different to them that leased expensive cars, only buy what you've the cash for now.

It was always a case of when, not if, this ludicrous house of cards came down. I imagine what we're hearing about now is the very tiniest tip of the mahoosive iceberg.

You have to ask, when you look at the detail, who the **** signed off these contracts. The private companies had them stitched up from the start, so they really couldn't possibly lose! The whole principle of PFI was utter insanity from the off!

In the prevailing financial climate at the time, The labour government could have borrowed capital for infrastructure projects at minuscule rates of interest! Instead they effectively opted to go with the loan sharks. Utter economic madness!!

as a card carrying free marketeer, bastard banker, baby killing, kitten drowning tory voter.....

I completely agree with you comrade.

PFI: one of the dumbest ways of financing anything. Sell your government covenant for nothing and let someone else milk your AAA for 25 years. Duh!

baby free, kitten carrying, Tory killing

I knew we had some common ground, comrade. 😉

Instead they effectively opted to go with the loan sharks.

DoH/MOD is basically a revolving door - with seconded management con.sultants crayoning over everything.

Aye they are a stupid idea.
Have we actually found a STW political/economic consensus?

Interestinglly Andrew Marr wrote about PFI at some length in his 'History of Modern Britain' and concluded that it was a truly silly idea but that despite all the main parties having issues with it at one time or another the politicians all went along with it becuause they expected they would have to use it themselves if they ever made it into power and so it has come to pass.

Bizarrely Stephen Dorrell, a Thatcher cabinet minister did say today that the PFI companies SHOULD take a hit. Quite right they should but i fear it would not survive the courts.

We are all truly screwed.

reckon. where's TJ?

The initial purpose of PFI albeit not its stated one was to essentially limit the civil service's ability to change its mind which was causing massive cost overruns. (The stated one was risk transfer).

Unfortunately this initial purpose was somewhat forgotten when it was realised the Government could fund loads of capital expenditure off balance sheet.

It was not that profitable for a lot of the contractors either - because the bidding process was so complicated, the cost of each bid was huge, and the unsuccessful bid costs would need to be recouped from the successful ones.

Do we have a consensus? The one thing about PFI is that I can't recall a single person outside the Blair/Brown axis of ****dom that thought it was a good idea.

I suspect that the nice folks who are charging £61 million PA to a south London NHS trust are also pretty keen, though I doubt they'll be doing to many press conferences to trumpet their opinions as to why.

as a card carrying free marketeer

So were those who thought up these PFI schemes in the first place. Unfortunately all the main political parties were full of free marketeers at the time, and still are.

Do we have a consensus?

Only that it was a stupid idea. I'm sure there won't be a consensus on how to deal with the problems arising from PFI, or more importantly how Langsley uses this situation to further his vision of the future for the NHS.

binners - Member
Do we have a consensus? The one thing about PFI is that I can't recall a single person outside the Blair/Brown axis of ****dom that thought it was a good idea.

Do we have a consensus? The one thing about PFI is that I can't recall a single person outside the Blair/Brown axis of ****dom that thought it was a good idea.

Apart from the Major government that introduced them, and the coalition government that is continuing to agree to them. I really have no idea why successive governments are so keen on them. They always seem to be far more expensive than if the government were to just borrow the money through the normal channels and complete the project themselves, so why do we keep signing up to them? Do they not count as central government borrowing or something this way? Allows the politicians to massage the figures and pretend they aren't spending the money?

I don't think the idea is necessarily stupid, the government underpriced big construction project risk, at least PFI put a price on it, albeit a high one. In its place it is perfectly sensible but I fear it was used because it allowed the expenditure to avoid scrutiny rather than for better reasons.

But creating PFI projects created jobs...and would boost the economy

Labour you pillocks.

hora, PFI was 'invented' under the Major government. 😉

But yes, It stank under the conservatives, it stank under Labour and it stinks under the present government.

I work in a PFI building. Back of beermat calculations say our is costing the taxpayer not far off twice what it would have cost the 'find/borrow money and pay architects/builders' way. (bit more complicated than that, but you get the picture) And then we have to give it back after being bummed for half a million pounds rent a year for 25 years 👿

PFI was the likes of Crapita under the Tories (i.e. outsourcing initiatives), it was grown and blown into huge capital projects...

Yep silly idea, however unless something has changed in the last couple of weeks it's still going on, ask Boris how the London fire brigade intend to finance the building of a couple of new fire stations.

Must be the backhanders!

PFI has been a shackle on NHS Trusts for years. Sure, you get a shiny new hospital in place of your delapidated one, but if you want to tweak your services and require even the most minor facility change, the cost is exorbitant.

Major introduced it, but Blair really went to town, mainly because Labour politicians like opening new hospitals. One of the worst examples of an unnecessary and overpriced new district general just happened to be right next to Sedgefield. It's now an expensive shell with many of its services shipped out to other, bigger towns.

its the ideal politicians tool- by the time the faeces hits the fan youve served your term and now sit as an exec ceo on various corps/ hedge funds - that probably still milk money out of the government via pfi

Back of beermat calculations say our is costing the taxpayer not far off twice what it would have cost the 'find/borrow money and pay architects/builders' way.

Scottish Parliament Building was ten times over budget so twice is pretty good value compared to that. Governments don't spend money well, PFI was a method of achieving better spending, and without it we will need to find something else.

PFI in the broadest principle is a good think IMO.

You take a large capital project that forms part of the state infrastructure and you out source the whole project for a price lower than what you can deliver it for ‘in house’. You don’t need to look at many gov run projects to work out they are generally over budget, inefficient and disastrous. Incentivise the private sector to do it properly and at a lower cost – it should work.

Hasn’t worked in many cases though and the key factor is the risk of failure should have been transferred to the private sector although the contracts are so complex and the service delivery is so crucial that bail outs will be inevitable.

I don't disagree with the concept of outsourcing projects, its the presumption that a government can outsource the supply of capital at a lower cost than themselves that is ridiculous.

[url= http://www.telegraph.co.uk/news/politics/8457645/Coalition-is-sticking-to-wasteful-PFI-funding.html ]Coalition is sticking to wasteful PFI funding[/url]

I hope something has changed since then, but I imagine nothing has. I guess they're perfect for modern politics, you deliver new projects without any spending, and leave the next guy to pick up the pieces.

The awful thing is that these schemes are still going ahead. 2 such ones have recently started construction in my area, when all the costings prove them to be a complete money pit.

Unfortunately the NHS can't win. Government policy dictates we have to do it, private industry knows the NHS have to do it so exploit it to the max. You would beleive some of the stupid contractual arrangements that are signed up to.... a quick example.

An existing PFI building was badly designed so is inherantly too hot all the time. NOTHING can be added to the building without the consent of the PFI company who owns the building. So when an air con unit was asked to be put in they said yes sure. That will be £*k charge for the unit, plus a monthly charge of £x for 25 years.

I've also worked from the other side though, working for one of the UK's largest engineering/fitting companies and they would exploit the NHS where ever possible, whether through contracts or not paying invoices. So its not just the Governments fault, if people want a good vfm NHS then private industry should be prepaired not to exploit it.

And users of the NHS should be happy going to old out of date buildings, not expecting shiny new (cheaply built) buildings.

So like state pensions, politicians come up with wheezes to spend money but effectively shift the cost/financing off balance sheet. Quelle surprise, especially Brown's love affair with the idea! And these charlatans have the cheek to criticise banks for doing the same thing (after they held interest rates artificially low and encourage banks to lend money to people who couldn't afford to pay it back). How is that for hypocrisy? Then they show their business savvy that comes from years of experience outside the Westminster Village in negotiating contracts! And people want to give these buffoons more tax payers money to spend. The mind boggles.

It will be interesting to watch the Milliband, Burnham and Balls trinity comment on this today! Perhaps Balls will sober up from his leak posturing over the fuel duty yesterday. Why does such a bright guy feel the need to behave like a little kid?

hora - Member

PFI was the likes of Crapita under the Tories (i.e. outsourcing initiatives), it was grown and blown into huge capital projects...

Indeed, but the precedent for buildings as well as the running of services was set under the Major government: 15 pfi projects (as in actual buildings) at a capital value of £709 million were agreed before Nulab came into power. These were mostly government/local government offices, but also included 5 prisons and Derbyshire Police HQ. Hiding in there were also some offices (a snip at 1.6 million and a mere 16 year contract) for my own former employer Leicestershire and Rutland NHS trust.

What equally interesting with all the shake up of the NHS of late ie demise of PCT's is that there are a number of PFI buildings that currently are leased by PCT's from the PFI provider, but NHS Trusts are refusing to take them on as they will bankrupt them.

It looks like yet another suedo NHS organisation is having to be set up just to take on a portfolio of properties that no one wants.

It's not just the NHS who are PFI dependant. Education, military, Ambulance, Search and Rescue, Police, Fire. They've all got liabilities under them.

Stupid idea from the very start. Wonga.com financing but on a national scale.

And users of the NHS should be happy going to old out of date buildings, not expecting shiny new (cheaply built) buildings.

I'd rather be treated in one of the old anderson huits that used to make up our local hospital by happy well paid staff than have to go 50 miles away to the thoroughly miserable superhospital.

Wonga.com financing but on a national scale.

TBF wonga pricing is based on the not unlikely chance of default. PFI pricing on the extremely unlikely chance of default. Its just that the government dont pay a rent based on that likelihood, but the contract owners finance on that basis. And take all the honey in between.

Wonga is more ethical than PFI IMO 😉

There was an interesting program about the pfi companies years ago (think it might have been a panorama investigation), was before I left the UK so must be at least 5 years ago. Revealed how these companies operate at every level, they are absolutely morally corrupt.

especially Brown's love affair with the idea!

Did the tories start them ? Are the coalition still doing them?
Why score really cheap party political points here? They all did it even your beloved Tories

Why does such a bright guy feel the need to behave like a little kid?

JY - you missed your smiley, otherwise you would think that those comments, especially the personalised ones were meant to be taken at face value!! (or are you just missing the IB on this thread?) Inconveniently I started by talking about (all) politicians rather than parties (ie, cross party politics, sorry if that needed to be spelt out better 😉 ) before highlighting one of the breed who had a particular affinity with off balance sheet tricks and dodgy accounting. I think it is you that (at least here) is showing the party political bias especially with the final comment - any reason why Balls went on a media frenzy yesterday morning???

I think that in a non-partisan way, it will be very interesting to see Mill/Burn/Balls response.

Politicians [b]of all parties[/b] (clear enough? 😉 ) have been keen on the PFI idea largely for supposed financing reasons and (guess what) the notion that taxpayers would be protected from financial risk and increasing costs. And the result?

Hence, the non-party political conclusion that "And people want to give these buffoons more tax payers money to spend. The mind boggles." [edit: read Ourman's comments below to see that]

When I qualified (as a lawyer), I had a choice of jobs: Projects or Corporate.

I chose corporate (i.e. mainly M&A, blue book and PE work), as I felt it had fewer ethical issues than working on PFI projects..!

(And the fact I have a short attention span: a couple of months on a deal was always better than taking 3 years to get to financial close on a schools project.)

EDIT - couple of extra things. I used to do corporate structuring work on PFI deals (easy way to rack up the chargeable hours = end of year bonus). The most notable was a £4.5bn waste project that took up nearly 4 years of my life. Another - and this is where the lack of ethics comes in - was negotiating a joint venture agreement on behalf of both JV parties. Only in PFI....

PFI is not a bad idea, it has just been implemented in a stupid manner by the state. The whole point of PFI is that risk moves to the public sector. They should carry the risk, e.g. if the building does not meet the needs then they are responsible for making the changes. However in the contracts, the risk remained with the state!

It should also be noted that the state is not very good at estimating costs and running buildings. Generally they under budget and then get surprised when the real cost comes in. At least with PFI the companies needed to get the costings right.

Also the state needs to have some control on what the companies can charge and the margins. None of this is there!

However in the contracts, the risk remained with the state!

Have you seen the size of the things? There are usually 100+ contracts associated with each PFI, with the main project/concession agreement often running to 500+ pages,. with schedules of algebra in them. Too few people really understand the implications of what's being signed up to, and those that do are employed by the bank consortia or the private sector parties....

BTW - the Ball comments relate to the Fuel Duty not his "economical with the truth" comments about when certain PFIs were signed off. But both are examples of a bright guy acting in a rather dim way. But that's politicians for you! Chloe Smith was doing much the same thing on Newsnight as noted in the other thread.

I think it is you that (at least here) is showing the party political bias especially with the final comment - any reason why Balls went on a media frenzy yesterday morning???

Politician courting popularity via the media and populist campaigns MADNESS...I have no idea what he was thinking of tbh and thank God Gideon and the govt stood firm and did not give in or talk to the media eh

Poilitician in being a politician shocker.

We may just both be biased
Have saved the chloe smith link to watch later as I cannot get the i player here

It should also be noted that the state is not very good at estimating costs and running buildings. Generally they under budget and then get surprised when the real cost comes in. At least with PFI the companies needed to get the costings right.

This does sometimes seem to be the case, at least with high profile projects, but as far as I can see there is no reason why the public sector should be any worse than the private sector at this.

Genuine question, as I was twenty years off being born then, but what happened during the last major period of hospital, school and council house building in the 1960s & 70s? I know many councils had their own architecture departments, which presumably provided some expertise. Did they manage to keep costs under control? How did we pay for all of it?

Junkyard - Member
We may just both be biased

Of course 😉 (but not in the way you imply!)

Junkyard - Member
Have saved the chloe smith link to watch later as I cannot get the i player here

Do and then watch the "In the thick of it" clip - which one is the spoof?

I'm a PPP lawyer, I don't like PFI.

but what happened during the last major period of hospital, school and council house building in the 1960s & 70s?

Enoch Powell successfully lobbied the treasury to commit to a ten year funding programme for hospital construction.

[i]Junkyard - Member
Have saved the chloe smith link to watch later as I cannot get the i player here[/i]

on youtube too on the thread to solve that problem 🙂

part of our system I believe - a problem with both politicians and the people

if you want people to vote for you then you give them something nice, saying we can't afford it, which is what should have been said would get you out of power pretty quickly

Bankers were vilified (rightly so) for their abuse of other peoples money I can't help but feel that not only have politicians done this but they've got away with it.

Generally they under budget and then get surprised when the real cost comes in

Except that Gov's topdown enforcement of such policies (many Trusts were pretty much negotiating with their hands tied) in the NHS often involved massaging the financial comparators, so as to make PFI appear better value than usual procurement routes.

It was largely rubbish - and there was vehement opposition on the ground (see also LIFT). It all helps, of course, if policy is effectively being written by consultants and accountants seconded from industry - coupled with banks oh-so-eager for taxpayer funded revenue streams, sweet re-financing deals etc etc. Certain interests are doing well - all a long way from the front line, which is under increasing duress. Patient care is sufffering, whilst payments continue to made for for ridiculously-specified contracts.

I swear to Gawd, it's enough to make me build a wall* and reach for a rifle. 👿

*On some sort of lease-back deal, of course.

Generally most of the 'problems' with PFI / PPP stem from the failure of government or the procuring departments to manage PPP .... They continued their poor track record in procurement developed over many years in traditional projects and transported their ineptitude to a then new contract form (new to them......)

Its very easy to throw blame at ppp however the NHS and MOD have been inept... Poor procurement teams.... Poor technical advisors (Selected by poor procurment teams)..........

Wonga is more ethical than PFI IMO

They should use that in their advertising.

The bloke who runs Wonga is a large Tory doner*. I expect them to be taking over the contract to pay benefits, from the Post Office soon. You'll be able to access your benefit payments early, at very reasonable rates of interest 😉

* As in, he makes large donations to the Tory party. I don't know if he's a big fat biffer or not.

One of the major problems with PFI under the last government was that projects had to be expensive to attract private interest. So we had situations where hospitals needed a refit ended up being demolished and rebuilt at 10 times the necessary cost.

there is a lack of understanding of PF typified by the following post

[julianwilson - Member
hora, PFI was 'invented' under the Major government.

But yes, It stank under the conservatives, it stank under Labour and it stinks under the present government.

I work in a PFI building. Back of beermat calculations say our is costing the taxpayer not far off twice what it would have cost the 'find/borrow money and pay architects/builders' way. (bit more complicated than that, but you get the picture) And then we have to give it back after being bummed for half a million pounds rent a year for 25 years ]

Wrong ..... generally ownership reverts to the procuring authority... so it's not 'rent'..... secondly there is normally a handback criteria.... typically condition 'B' in the case of the NHS (means in good working condition with cosmetic defects blah blah blah)Thirdly there will be a residual life condition so that the assets will have a guarenteed lifespan..

fourthly government depts NHS are useless at maintaining there assets and most have huge backlog maintenance issues... a 25 yr old trad project will be in a poor condition.....

opps forgot to mention cost over runs in building and operating sit with the SPC company....

the failure of government or the procuring departments to manage PPP

Hardly a surprise when procurement itself is so dominated by external interests.

The likes of Mckinsey, PWC & other such consultancy/accountancy big guns have [url= http://www.unison.org.uk/acrobat/b362.pdf ]long been sticking their fingers in[/url] MOD/DoH pies - all of 'em enthusiastically pushed PFI, despite well-placed warnings about the [url= http://allysonpollock.co.uk/research/CIPHP_2009_Liebe_NHSPFI.pdf ]consequences[/url].

Just as we get the politicians we deserve, it says much that we have allowed such a grasping & dysfunctional culture to thrive in both Health and Defence.

Noteeth primary responsibility sits with the mod nhs trusts they generally appoint there technical team and fail to hold them to account....

I'm not saying there's a problem with the principles of PFI just that the majority of failings are attributable to poor / weak procurement + missed opportunities to maximise benefits for joe tax payer patient pupil etc

there is a lack of understanding of PF typified by the following post

Indeed there is.

Wrong ..... generally ownership reverts to the procuring authority... so it's not 'rent'.....

Ownership generally reverts at the END of the contract term, so the authority does not own the asset for the first 25-30 years normally.

The unitary charge paid by the authority to SPV (mostly) works on an availability basis, so the authority is paying for the use of the asset, which is actually quite close to a lease arrangement.

secondly there is normally a handback criteria.... typically condition 'B' in the case of the NHS (means in good working condition with cosmetic defects blah blah blah)

Not quite sure what you mean here. If you're talking about practical completion of the building phase so that services can commence (i.e. the building is ready for pupils, patients, staff to use), then the building will never reach full service commencement until the building has been "accepted" by the Authority - which won't occur until the building meets the spec.

If you're talking about handback at the end of the contact term (again, normally 25-30 years), then yes, it will need to be handed back in a specified condition, but that's a moot point since the FM contractor will have been maintaining the building (ultimately at the authority's expense) throughout the contract term.

Thirdly there will be a residual life condition so that the assets will have a guarenteed lifespan..

Not quite true. It's is possible to work out the life of an asset at the end of the contract term, but that is by no means guaranteed. The problem is, and you actually touch on this below, that once an asset is handed back to an authority it often is maintained at a poorer standard than when the money was flowing to the FM contractor and the useable life of the asset will be reduced. It really comes down to how well the authority manages the asset and how much money it throws at it after it has been handed back.

It may look good to the authority on paper (e.g. "hey, once the contractor walks away, we'll still have another 20 usable years left in the asset! Great value for money!"), but the reality is that those figures are based on a level of FM which the authority is not likely to achieve.

fourthly government depts NHS are useless at maintaining there assets and most have huge backlog maintenance issues... a 25 yr old trad project will be in a poor condition.....

Agreed.

Oddly enough, most authorities are happy to spend 2x the true value of a project when someone else is taking care of it, but when they have to do it themselves they become very shy with cash. Add in crap management and you have a sorry state of affairs.

Interestingly, the balance is to have the skills and resources of the private sector, but available within the public sector. Which of course is never going to happen, so instead the public sector will be held to ransom to pay for skills and resources they don't have but think they can afford.

opps forgot to mention cost over runs in building and operating sit with the SPC company....

Hmmm, that's what the authority is told will happen. SPV is cash neutral, which means the authority or sub-contractors are always going to take the hit. In reality it is often the Authority which ends up footing the bill for cost overruns. Even if not for all the overruns, certainly for a large amount which it did not take into account and often cannot afford. The private sector will NEVER take a financial hit unless there has been a major screw up, which there tend to be few of.

Noteeth primary responsibility sits with the mod nhs trusts they generally appoint there technical team and fail to hold them to account....

I'm not saying there's a problem with the principles of PFI just that the majority of failings are attributable to poor / weak procurement + missed opportunities to maximise benefits for joe tax payer patient pupil etc

With a few exceptions (for example very small projects), technical, legal and financial advisers are appointed by way of a procurement competition. I don't often see a poor appointment of advisers, but I do see authorties who simply don't know what it is they want and are then surprised when things don't go according to plan.

The MAIN problem with PFI, is that it is expensive. The costs of running a procurement competition, adviser fees, the current funder positions (i was just quoted 550 basis points by a major syndicate bank for senior debt on the construction phase of a pretty "secure" project. That's one of the highest i've ever seen), the fact that contractors (both building and FM) have been so used to the bottomless pit of money thrown at PFI over the years and pricing accordingly, and most of all, that authorities have no idea how much things are truly worth to them (we've stuck some extremely pointless "add ons" into buldings which were unnecessary and expensive, but specified by the authority anyway).

There's a lot that needs to be changed.

T1000, I take it you have figured out where I work, which project it is I was referring to and how much I was (reluctantly!) involved with the start-up of it then. Please note I refered to my building, not everyone's. 😉

The silver lining to the disruption to our service from the endless 'teething troubles' of our building is seeing how much time and money the building company (whose name is 'helpfully' displayed at entrances to the building) is spending on putting them straight. 😆

julianwilson - Member

no idea which building your refering too!

[The silver lining to the disruption to our service from the endless 'teething troubles' of our building is seeing how much time and money the building company (whose name is 'helpfully' displayed at entrances to the building) is spending on putting them straight]

Hopefully whoever is administering the contract is making use of the availability criteria... and holding them too account...

[The MAIN problem with PFI, is that it is expensive] the main reason it can be expensive is because of poor procurement........(compounded by poor advisors)

the main reason it can be expensive is because of poor procurement........(compounded by poor advisors)

It's not as simple as that.

I've advised on countless procurements globally, and they all suffer from similar problems (generally in this order):

1. politicians promising infrastructure which is unnecessary, unrealistic or prohibitively expensive

2. authority internal procurement teams formed who do not have the necessary expertise to carry out the procurement

3. in order to compensate for a lack of expertise, authorities are over reliant on external advisers, and often adopt an attitude of "if the figure attached to what you are saying is palatable, let's do it", without properly understanding what it is they are saying yes to

4. the public procurement procedure in EU is a one size fits all. It works OK for small to medium sized projects, but is not fit for purpose for large infrastructure projects IMO. I've closed almost 10bn euro of competitive dialogue competitions in the last year or so. Competitive dialogue is extremely expensive. If you have 3 bidders at dialogue stage, that means you are duplicating costs and effort x3. Some form of negotiated procedure would be far better suited to high value projects and would undoubtedly be cheaper (at the moment it is quite difficult to get treasury/IUK to buy into a negotiated procedure. The main issue with competitive dialogue (compared to a negotiated procedure) is that the authority needs to be 100% positive on every aspect of what it needs, if you go out to market to build something significant and the market says "actually, you'd be better doing it like this" then you are screwed with competitive dialogue, you can't really move from your original spec. You're tied to your own lack of knowledge of what it is you are procuring. By going out to the market with a negotiated procedure, you allow the industry to offer you the best solution with proper value for money - not just the best value for money based on your spec. This works well most US PPP projects I've worked on.

5. Because competitive dialogue (and UK procurement generally) is very expensive for bidders, those bid costs are absorbed by the prices tendered. In addition, bidders are working on the basis that they won't have a 100% success rate for all project they bid for, so the unsuccessful bid costs are also rolled into the successful tenders.

6. This next point is the KEY reason why PFI projects are so expensive...procuring authorities have no idead what things should actually cost. They are playing with daddy's credit card and the sky is the limit. I've watched high schools go up right next to each other, with a PFI costing almost double that of a non PFI school. But authorities seem to be oblivious to this, they look at what is normal in the PFI market, not building/FM generally. If you were buying a bike/car on finance and the salesperson offer you a couple of unnecessary but very attractive options for only a few quid extra a month, you'd probably say yes. If you were buying outright, the extra lump of cash for pretty components would seem much more expensive. It's the same with infrastructure, some of the things I've seen specced in schools/hospitals/prisons etc is quite frankly, shocking.

I know you're quite keen on the point that poor advisors are key to the "failure" of PFI projects achieving value for money, but I have to disagree. I am, and I work with, legal, financial and technical advisers from across the world who are extremely capable of delivering some of the largest infrastructure projects in living memory. To suggest that it is a team of professional advisers who are poor (despite a collective expertise in the field of hundereds of years) and NOT the authority client who has little or no knowledge of PFI/PPP/infrastructure etc, is crazy.

The best projects I've ever been involved in are those where the authority appoints a couple of industry experts to act as commerical client and leave the task of heading up the procurement to them. It's crazy, I've just come off a $4bn rail project in the US where they pulled some of the leading industry figures to act as commerical client on behalf of the procuring authority. Whereas in the UK it's not uncommon for authorties to appoint public sector "managers" to head up complex and high value procurements where those people have NO knowledge whatsoever of the industry they are working in. It's not appropriate for me to give specific examples, but I can assure you it happens a lot. How can that ever work?

I know you're quite keen on the point that poor advisors are key to the "failure" of PFI projects achieving value for money, but I have to disagree. <...> To suggest that it is a team of professional advisers who are poor (despite a collective expertise in the field of hundereds of years) and NOT the authority client who has little or no knowledge of PFI/PPP/infrastructure etc, is crazy.

This sounds depressingly similar to my experience of IT projects in the public sector, one principal reason so many go over budget is the client's lack of experience and knowledge.