Clause 7 - Credit arrangements
Local Government Bill
10:30 am
Mr Edward Davey (Kingston and Surbiton, Liberal Democrat)
I agree with the hon. Gentleman that this has been a useful debate and that the Under-Secretary has been helpful in explaining some of the Government's thinking on the matter. However, I am disturbed by some of his remarks, as it seems to be the Government's intention to retain bias towards PFI in the system. The Under-Secretary was not explicit, but he said that when the Government eventually publish their thinking on revenue support for capital finance in local authorities they may decide to give extra support for PFI borrowing. Many people outside the House will be concerned that the Government are taking that route, despite the evidence from the Audit Commission and others.
The Under-Secretary referred to the first 17 schools, but the report, which is very authoritative, considers the matter in detail. It looks at the PFI experiments and new school buildings across the piece, comparing PFI with more traditional options. Although the conclusion omits the fact that as the experience of using PFI in schools continues, lessons will be learned and the practice will improve, its recommendations are clear: it wants barriers and restrictions to other forms of borrowing removed so that there is a level playing field. The thrust of the Minister's remarks was that the Government would not adopt that proposal. While the hon. Member for Runnymede and Weybridge was speaking, I read the notes on regulation 7, which state that
''the Government still wishes to encourage the use of Private Finance Initiative contracts, where they represent best value. PFI contracts are credit arrangements which provide the authority not only with a capital asset but also with associated services.''
That suggests that the Government are keen to give PFI special treatment. I accept that amendment No. 50 would not get rid of that special treatment, but this has been a useful debate to tease out the latest Government thinking on the matter. I will not divide the Committee on the amendment, as we will return to the issue. It worries many people, especially when the Government are not following the Audit Commission's recommendations. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.