Wednesday, February 06, 2008

Lackadaisical And Arrogant

This afternoon Tyler attended the latest Public Accounts Committee session on PFI. On the table was the recent NAO report on how the public sector gets ripped off when it orders changes to long-term contracts (blogged here) On the griddle was John Kingman, the Treasury mandarin in charge of PFI, and his two wingmen.

The session did not go well. When asked about the millions being ripped off, Kingman and his men played the familiar not-me-guv line. It was all down to those idiotic local authority people and NHS hospital administrators out in the provinces not having the skills necessary to manage contracts properly. Cuh! What can you do?

So why hadn't the Treasury ensured the proper skills were in place and best practice followed? Isn't it appalling that one in three PFI hospital contracts - with annual payments running into millions - don't even have a full-time contract manager?

Ah, well, that's not Whitehall's responsibility- "there is such a thing as local democracy, you know."

But since the Treasury has been driving the whole PFI programme, shouldn't the Treasury have made absolutely sure the sharp end could handle it?

Alas! That's not our role, and we couldn't possibly do it. We can only lay down best practice and hope it gets implemented.

So what you're saying is that there is a hidden cost for PFI customers in staffing themselves up for contract management.

Well, mumble mumble... perhaps one of my colleagues knows the answer...

PAC stalwart Richard Bacon suggested another factor: "is it not the case that these PFI deals are all done by a bunch of highly able, extraordinarily highly paid people in London, who know each other very well, and regularly quaff magnums of champagne together? And is it not the case that those people are entirely deal driven, without a shred of interest in what happens afterwards when the contract actually has to be managed by some poor local council schmuck out in the sticks? " (I paraphrase).

Well, no, blah blah best practice blah operational task group blah blah blah... perhaps my colleagues know the answer...

It was all too much for Chairman Leigh, who had one of his nasty turns: "Mr Kingman, you come here unable to answer any of our questions, and you're lackadaisical and arrogant!"

Lackadaisical and arrogant: an excellent summary of the whole PFI programme. It was dreamed up by investment bankers, swallowed whole by off-balance sheet commissars, and dropped down with virtually no thought given to the practical details of how it would actually work on the ground. And there's precious little interest in improving things.

According to HMT, the present value of future contracted PFI payments is now £91bn. Much of that remains off the government's Enron balance sheet. A pity the costs cannot be magicked away so easily.


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