PFI: Pricey, Fractious, Inefficient

In its guidelines, it talked about squeezing costs – and at the same time retaining or improving on quality levels. It also suggested that partnership working could be an effective efficiency measure, so long as it leads to “better outcomes than would have been achieved through increased spending on [an] existing approach”.

Certainly, the kind of partnerships that Labour party chairman Ian McCartney talks about in his interview this week (pages 22-24) resonate with promise, in the event of a Labour third term.

The single-site service centre that is currently being built in McCartney’s constituency of Makerfield, for instance, is a prime example of how different funding streams can be pooled to improve a community’s housing, education and healthcare.

His idea to run a chain of older people’s “campuses” out across the UK, again based on the one-stop-shop model, shows equal potential – even if his proposal brings to mind the sterile and slightly disturbing retirement village that gave the 1980s film Cocoon its backdrop.

However, some partnerships set up under the current government have not worked so effectively – let alone “efficiently”. Swarcliffe estate in Leeds was one of eight locations that hoped to be modernised using a private finance initiative housing scheme run by consortium Yorkshire Transformations. Six years on, squabbling over costs have only just been resolved, leaving the consortium free to go ahead with its plans (HT 19 May 2004, page 14).

At least Swarcliffe survived. Camden council’s PFI for Chalcots estate in north London was axed by the Treasury thanks to concerns over rising costs back in February this year, apparently upholding the conclusion of a Standard & Poor’s report, which claimed that red tape was choking the PFI process (HT 24 March, page 10).

If housing sector efficiency is to remain high on the government’s agenda post-election, the ODPM should perhaps consider reviewing how PFIs are negotiated and administered. Labour doubtless expects a sizeable chunk of its annual £835m housing savings to come from these schemes.

A Conservative government would arguably expect the same, if not more.

But unless something is done to simplify private finance processes, it’s unlikely that the words PFI and efficiency will be used in the same breath.

Not unless the speaker were defining an opposite.