Monday, September 01, 2008

PFI fees breach Treasury's own guidelines

According to the Public Accounts Committee report (officially published tomorrow), changes required in the operating of PFI contracts for schools and hospitals are under-managed, cost the taxpayer £180 million and only 27% of project changes over £100,000 are subject to competition.

Worse still, many PFI bbreach the Treasury's own guidelines. Accoridng to the reports conclusions, the "[m]anagement fees cost the taxpayer over £6 million a year, despite Treasury guidance issued in March 2007 which advised against the payment of management fees in new PFI deals".

Value for money huh?


Barnacle Bill said...

And who was in charge of the Treasury when most of these smoke'n'mirror deals were agreed?
Our glorious unelected Leader!

dreamingspire said...

High charges for variations are an old story: bid low on the main contract, make your money from the changes and maintenance. Burning our Money's classification of govt as the "Simple Shopper" is so right.

Anonymous said...

How do you not pay management fees? Pretty much demonstrates how little commercial experience Government has. If you sign a contract and you want to change the contract you pay to change it thus incurring 'management fees' it's a normal state of affairs. However, the issue here is the initial scoping of the contract driving the price down so companies cut out activities they know the project will need then adding them back in later under a change.

Lola said...

Brewery. Run. Couldn't. A Pissup. In a.