PFI Contracts and Carillion

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 27th February 2018.

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Photo of Graham Jones Graham Jones Chair, Committees on Arms Export Controls (formerly Quadripartite Committee) 12:00 am, 27th February 2018

Whether he has reviewed his Department’s procedures for authorising and monitoring private finance initiative contracts as a result of the liquidation of Carillion.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I am sure that the hon. Gentleman knows this, but just to put it in context, the vast majority of all current PFI projects—86%—were signed under the previous Labour Government. Since coming into office in 2010, this Government have reformed the approach, so that now PF2 contracts deliver better value for money for taxpayers. The performance of PFI contracts, including those where Carillion is involved, are monitored by the procuring authorities. New PF2 contracts will be subject to a rigorous value for money assessment. There are currently no PF2 projects in procurement.

Photo of Graham Jones Graham Jones Chair, Committees on Arms Export Controls (formerly Quadripartite Committee)

I am concerned about the workers. Apparently, 90% of Carillion’s private sector contractors have suggested that they will continue to pay staff, but only in the interim period. What about the 10% who are not going to be paid, and what is going to happen to the staff after the interim period? Are the Government going to guarantee the employment status and pay of those individuals?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The hon. Gentleman may be slightly confusing PFI contracts with outsourcing contracts that do not involve capital structures. The resolution of Carillion continues. So far, there has been a very high rate of uptake by private clients of Carillion to continue the services that are being delivered, and we have high hopes of protecting the vast majority of the jobs involved.

Photo of Alex Burghart Alex Burghart Conservative, Brentwood and Ongar

What are the Government doing to improve transparency in public-private partnerships?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

We absolutely value transparency in the public-private partnerships that are delivered. They are an important part of the overall infrastructure. As I just explained to the House, there are currently no PF2 projects in procurement. That indicates that we have set the bar for value for money in public-private partnerships very high, and we will continue to do so.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

Order. This is a rather extraordinary state of affairs. I hope that Graham P. Jones is not indisposed, and if he is I am sorry, but otherwise there is absolutely no basis for his leaving the Chamber during the exchanges on his question. That is a rank discourtesy to the House—and a discourtesy to the Chancellor as well, for that matter. It must not happen.

Photo of Anneliese Dodds Anneliese Dodds Shadow Minister (Treasury)

The shadow Chancellor recently wrote to the Chancellor asking when he will produce revised value for money guidance, as highlighted by the National Audit Office; an updated list of PFIs, as existing data is nearly two years old; and details of any assessment the Treasury carried out on Carillion’s readiness to fulfil its PFI contracts. When will we get them?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I have not yet received a letter from the shadow Chancellor, but if he has written to me, I shall of course reply to him and answer his questions.