PFI delays cost taxpayer £67m

Delays to PFI projects have cost the taxpayer at least £67m since 2004, the government’s accounts watchdog revealed today.

The Public Accounts Committee has unleashed a stinging attack on PFI, slamming the procurement method as worse than it was four years ago.

In its report, published today, the Committee said: "The proportion of deals attracting just two bidders has more than doubled since its last report, in 2004."

The average tendering time for projects in 2004-6 was 34 months, compared to 33 months for projects that closed before this time. One third of public sector teams made changes to projects after a preferred bidder was selected.

Edward Leigh, chairman of the Committee of Public Accounts, said: “The average length of tendering time is now nearly three years. Schemes are thereby delayed and market interest weakened because the costs of making a bid are driven up.

“And the lack of PFI expertise among the public sector procurement teams is resulting in poor negotiating with bidders who often have the whip hand. The public sector must not be placed in this vulnerable position.”

The Committee said that there was evidence that the market was weakening as a result of frustration with PFI, with “fewer serious bids for recent deals.”

The Committee called for drastic improvement of the government’s PFI expertise, including the development of a secondment model which would allow exchange of procurement experts in the public and private sectors.