Campaigns: Lobbying - Helping private funds go public

The Private Finance Initiative (PFI) was introduced in 1986. The aim was to bring private finance into publicly-sponsored capital projects, whether roads, prisons or in this case, hospitals. Since then, few projects have been signed and the process has been criticised for its sluggishness and controversy over whether the private cash replaces or boosts government input.

The Private Finance Initiative (PFI) was introduced in 1986. The

aim was to bring private finance into publicly-sponsored capital

projects, whether roads, prisons or in this case, hospitals. Since then,

few projects have been signed and the process has been criticised for

its sluggishness and controversy over whether the private cash replaces

or boosts government input.



General Healthcare Group, which owns and operates 25 hospitals in the

UK, is working in a consortium with builders John Laing and merchant

bank BZW to build the new pounds 170 million Norfolk and Norwich

Hospital. The deal is the largest on the PFI drawing board.

Unfortunately, for the past two years, that is just where the deal has

been stuck, waiting for the government to give the thumbs up.



Objectives



The Treasury Committee held a short enquiry into PFI in January

1996.



General Healthcare asked Pielle to outline its problems with PFI to the

committee. First, that private sector expertise had become much more

sophisticated since the mid-1980s and negotiations needed to take this

into account; civil servants needed training in PFI - preferably several

weeks as part of their civil service treasury training; and finally PFI

contracts should take account of long-term timescales and not get bogged

down in details, such as menus and lawn mowing frequency, at too early a

stage in discussions.



The report was published in May.



Tactics



Pielle (whose chairman is former Welsh Secretary Peter Walker) submitted

two memoranda to the committee, detailing the group’s concerns on PFI,

the provision of clinical services, the monitoring and bidding process

and the training of civil servants. It also supported reports by the

Adam Smith Institute and the Fabian Society and supplied the memoranda

to backbench committees and the Treasury. It set up a meeting between

General Healthcare and John McGregor, MP for Norfolk and former Chief

Secretary to the Treasury.



Results



This deal was given the final go-ahead in the Chancellor’s budget speech

last November. Pielle achieved watered down versions of its main

objectives - that civil servants should have some training in PFI

negotiation and initial bids should not demand the level of detail

initially required by the government.



Verdict



Committees don’t often quote directly from evidence in their

conclusions, but there was a specific mention of one of General

Healthcare’s points in the summing up. ’It was practical, cogent and

short. Their points were honest and we felt they put them as well as we

could,’ said one member.



Campaign: Private Finance Initiative on behalf of General Healthcare

Group

Timescale: 12 months

Cost: Around pounds 30,000

PR Team: Pielle



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