The Private Finance Initiative (PFI) is the UK government’s preferred way of investing in public sector infrastructure, by using private sector monies and skills and moving the ‘risks’ in projects, such as major IT programs. However, concerns continue about the Initiative’s effect on both procurement and its sustainability.
The UK government’s Private Finance Initiative has come under fire in recent publications.
Here are a few words written about the PFI by Building magazine editor Denise Chevin in that publication, quoted by The Times in its Public Agenda supplement. Ms Chevin writes; The PFI was conceived as a means of bringing private money into the public sector, which it has done incredibly successfully. However, she continues, The problem is that this extra money has exposed the weakness of public sector clients. In many cases they resemble schoolchildren, grabbing every goody on show in the belief that they’ll be able to pay off a bit each week from their pocket money.
Another article cited in the same supplement identified two significant problems with the process, namely the bid costs for the companies wishing to provide services under PFI, and the decreasing number of firms willing to compete. This latter point was demonstrated in the second 10-year contract for the UK Inland Revenue IT service, where the Inland Revenue had to pay other companies upfront to compete with the incumbent, EDS.
Ms Chevin is not the only one to have criticized the PFI. Trade union group Unison has also published various documents highlighting the failings of the scheme. Unison’s stated reasons for opposing the PFI include concerns over private/public sector relationships, the scheme’s costs, and issues relating to the profits made by private companies under PFI projects.
Interestingly the words and articles quoted in the Times supplement did not come from an IT publication but from Building, a publication claiming to be the UK’s top magazine for building professionals. This suggests that buying infrastructure, whether IT or buildings, on the ‘never never’ of PFI, does not just transfer risks from the public sector – it creates new ones. In this and every circumstance, IT decisions are just business decisions.
Source: OpinionWire by Butler Group (www.butlergroup.com)