Whitehall’s thrilling finish

The government will spend 2003 perfecting its imitation of the hero in the final reel of an Alfred Hitchcock film as it races frantically to get schools, hospital and houses built in time for the general election.

There are three main obstacles to success. The first is the reliability of the PFI as an investment vehicle. As well as the bad impression created by the bitter, entrenched opposition of the public sector unions, there is the even worse impression created by the opposition of the Greater London Authority to the £16bn Tube part-privatisation.

And it seems likely the PFI will remain under attack in 2003. Just last month, a report by the Institute for Public Policy Research said there was little evidence it offered increased value for money. And even chancellor Gordon Brown has admitted there are limits to its usefulness in the defence, education and healthcare sectors.

The second problem is giving Whitehall the administrative capacity to achieve the wildly ambitious goals it has set itself, such as refurbishing every secondary school in the UK in the next 10 years. Last year the government tackled one of Whitehall’s most notorious difficiencies – its inability to get two departments to work together – by appointing Peter Stanton-Ifes and Peter Coates as procurement “tsars” for education and healthcare respectively.

The third problem – whether the money would still be there in the event of a recession – seems less like a problem after Brown’s pre-Budget statement. There he committed to increasing public sector borrowing £20bn over the next two years. The industry reacted with some degree of relief to the news – especially given what is happening to the commercial market.