Posted on 14-03-2010 at 01:00
Members of the county council's scrutiny committee are to look at the workings of three Norfolk deals, where the so-called private finance initiative (PFI) have been used, and whether the cash squeeze on council spending might mean more PFIs are likely in the future.
County Hall already has PFIs in place covering the replacement of half of Norfolk's street lights, the provision of salt to keep Norfolk's roads open during the winter months, and the building of five new junior schools and enlargement of one secondary school in the Norwich area.
But PFIs - under which private finance is used to pay for the delivery of large capital schemes such as hospitals and schools in return for public bodies paying an annual charge over a 25 year period - have come under fire from opponents as being unwieldy and not value for money.
A report to the council's scrutiny committee has concluded that council-tax payers get an enhanced service with little impact on council tax.
The street lighting PFI is ahead of schedule with a high approval rating while the Salt PFI has meant Norfolk has generally been in a better position than other councils regarding salt supplies.
And the schools build scheme has been delivered on time and on budget and at no net cost to the council.
But it also notes that PFI is only appropriate for projects costing more than £20m.
Paul Morse, chairman of the scrutiny committee, said it was important for councillors to keep a close eye on any scheme.
“When PFI first came to the fore during the 1990s, also at a time of recession, it's fair to say that the public was understandably suspicious about the costs involved - and whether the link between private finance and public projects would deliver value for money,” Mr Morse said. “Perhaps that perception is changing a bit, now we have begun to see PFI deliver facilities in Norfolk which would otherwise not have been built, and the public sector has clearly learned lessons along the way.
“As the squeeze on public spending takes a firmer grip, it's possible that PFI will perhaps increasingly be 'the only show in town' as more traditional sources of funding dry up. Most people would acknowledge that PFI is here to stay, but we owe it to the public to take a closer look at how we are dealing with the issue at County Hall and to voice any concerns we have to cabinet, should that be necessary.”
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