PFI Agreements

– in the House of Lords at 3:08 pm on 3rd April 2003.

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Photo of Baroness Wilcox Baroness Wilcox Conservative 3:08 pm, 3rd April 2003

asked Her Majesty's Government:

Whether they will publish a list of all signed private finance initiative agreements.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we already publish such a list. While procurement issues are a matter for the individual department concerned, departments contribute to a list of signed projects compiled by the Office of Government Commerce, which is publicly available on the Office of Government Commerce website. In addition, a full record of future payments under PFI contracts is published in the Red Book. The relevant tables are: C17, departmental estimate of capital spending by the private sector (signed deals); C18, estimated aggregate capital value of projects at preferred bidder stage; and C19, estimated payments under PFI (signed deals).

Photo of Baroness Wilcox Baroness Wilcox Conservative

My Lords, I thank the Minister for that Answer. When I think of the £100 billion involved, would it not be better, and does not the Minister agree that it would be in the public interest, to have a comprehensive list available, in a timely manner, in a prominent place, and in a format that is easily accessible?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, the noble Baroness, Lady Wilcox, has simply not listened to my Answer. I am inclined to say to her, "I've shown you mine, now you show me yours".

Noble Lords:

Oh!

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I have already said that such a list is available. As for the entirely bogus figure of £100 billion, which the noble Baroness and the Opposition keep on reviving, tell us what is in it.

Photo of Lord Saatchi Lord Saatchi Conservative

My Lords, familiar as he is with Section 6 of the Companies Act 1985, the Minister will know that that is the section which places an obligation on companies to obtain, before they publish their accounts, the approval of an independent auditor to the effect that the accounts give a true and fair view of the affairs of the company. Therefore, is it not a source of concern that when the Chancellor rises to give his Budget statement next week, he will not have obtained the approval of the Government's auditor for the figures that he will publish that day? In fact, is not the opposite the case? Has not the Government's auditor indicated his disapproval of the Government's method of presenting precisely these PFI and PPP liabilities to which my noble friend Lady Wilcox refers because they do not give a true and fair view of the Government's true liabilities?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, there are two points here. The first is the quite extraordinary suggestion that the Chancellor, in between completing his Budget calculations and making his Budget speech, should go to the National Audit Office for approval of all his figures. I think that Conservative Chancellors—I am sorry that there are no former Conservative Chancellors present—would raise at least one eyebrow at that suggestion.

The second suggestion is that the National Audit Office has indicated its disapproval of the way in which the PFI figures are presented. That is certainly not the case. If the noble Lord is referring to the issue of on-balance sheet or off-balance sheet, that is not a matter for government decision—it is between the National Audit Office and the Office for National Statistics. They have jointly expressed the view that these matters are properly presented in government statements.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Liberal Democrat

My Lords, can we turn now to the real effect of the PFI on real people in the real world? Has the Minister seen the account today in The Times and other newspapers that WS Atkins, the troubled support services group, is pulling out of a contract to run Southwark schools two years into a five-year contract? WS Atkins says:

"We are no longer prepared to carry on with a contract unless the margins hit our expectations".

In other words, heads we win, tails we walk away.

WS Atkins has seven PPP and PFI contracts in education, and it is about to take a big bite out of the Tube PPP through the Metronet consortium. When will the Government wake up to the risks of handing failing public services over to failing private sector contractors?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I cannot really believe that the noble Lord, Lord Oakeshott, is suggesting that somehow the Government, presumably through direct labour organisations, should carry out all construction and maintenance work in the public sector. The alternative is that private firms should do it. The noble Lord is now suggesting that those private firms should never be at any risk of financial failure. That cannot be the case—of course there are risks. The shareholders of WS Atkins take those risks. That is the point of private finance initiatives—that is the point of risk transfer.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Liberal Democrat

My Lords, that is exactly the point: the Government are taking those risks—

Noble Lords:

Order!

Photo of Lord Glenarthur Lord Glenarthur Conservative

My Lords, the Minister disputed the figure of £100 billion to which my noble friend Lady Wilcox referred. If he disputes that, will he give us the correct figure?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, it is not my figure. It is a figure dreamed up by the Opposition, and they have never succeeded in explaining it. I do not know what it comprises; I cannot believe in it until I see the evidence.

Photo of Lord Glenarthur Lord Glenarthur Conservative

My Lords, the noble Lord asks for a figure—

Noble Lords:

Oh!

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, can the Minister explain to my noble friend Lord Oakeshott: when is a contract not a contract?

Photo of Viscount Goschen Viscount Goschen Conservative

My Lords, can the Minister really derogate the Government's responsibility in the matter of the PFI and the PPP? Has not the National Audit Office expressed extreme concern about the off-balance sheet financing of Network Rail and has it not had a dispute with the national statistician about this? How can the Government sit back and say that it is nothing to do with them when it is a government-owned vehicle executing government policy?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, it is nothing to do with PFI. The classification of Network Rail is a classification of an organisation and not of an asset. The Office for National Statistics and the National Audit Office have agreed that, according to the way in which the ONS must classify Network Rail as per European accounting standards, it has been handled correctly.