Ministers told to sacrifice PFI schemes to get better value

The National Audit Office also insisted that civil servants should use the state’s huge buying power to obtain better deals, and boost their skills to avoid being outwitted by private sector counterparts.

The recommendations came in a report by the NAO into lessons that should be drawn from PFI schemes.

“The use of private finance has brought useful disciplines and a framework of support which are applicable to other forms of procurement,” NAO officials said yesterday.

“Our recent reports on PFI and other major projects have, however, highlighted that Government needs to act as a more intelligent customer in the procurement and management of projects.

“Value for money will be improved through officials being pro-active in: collecting data to inform decision-making; ensuring they have the right skills; establishing effective arrangements to test, challenge and, if necessary, stop projects; and using commercial awareness to obtain better deals.

“In the current climate, PFI may not be suitable for as many projects as it has been in the past,” the officials added.

“The lessons from PFI can, however, be applied to improve other forms of procurement to help Government achieve its aim of annual infrastructure savings of £2-3bn.”

The report calls for “robust, impartial scrutiny of the business case” for PFI projects, warns the mechanism could provide a tempting way to delay costs as the coalition seeks to tackle the deficit.

However, most of the UK’s 700 PFI contracts are managed locally.