LETTER : Give private finance a chance

Andrew Russell
Friday 19 April 1996 23:02 BST
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Sir: Andrew Marr ("A public finance scandal in the making", 11 April) must know that governments all over the world are recognising the use of private finance as the only way they will be able to deliver the social and economic infrastructure their people expect.

He says that PFI may cost the taxpayer more than "ordinary public spending". What does he mean? Are the millions spent annually on maintaining and running badly designed and under-specified schools, colleges, universities, hospitals and office blocks paid for by the taxpayer over the last 30 years "ordinary"? Are the rents paid annually to the private sector by government for the doubtful privilege of maintaining and insuring yet more of these kinds of buildings "ordinary public expenditure"?

Of course they are, although some of us would call them extraordinary too. The initial cost of a building is but a small part of the cost of maintaining it and running it during its lifetime, and looking back, to say 1970, or whenever we could agree was the heyday of "ordinary public spending", surely no one would agree that the cheapest capital cost always delivers the best value for money. These buildings are proving expensive to maintain and wasteful to run.

A government is not a better government because it owns buildings, any more than any business is a better business because it owns an office or a factory. Governments (and businesses) use buildings, but an increasing number of people in both sectors think it is better for others to manage them and be responsible for the risks of ownership, allowing occupiers to get on with the main purpose of their existence.

The PFI is based on a good idea. It is an idea which should (and in time, will) be just as attractive to the private sector as it is to government. It offers a better way of getting things done and spreading risk more fairly. If the responsibility for managing an asset throughout its life is placed squarely with the person who designed it, the investment which follows is likely to be better designed, easier to maintain and more efficient in its use. Why don't we give it a try? At least it gives us a chance of replacing all those horrors we built in the 1960s and 1970s.

Andrew Russell

Chairman, PFI Forum

The Royal Institution of

Chartered Surveyors

London SW1

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