Firms involved in Private Finance Initiative (PFI) projects have welcomed a succession of moves by the new Government to kickstart PFI, saying they are reassured by the speed with which Labour has acted.
Since coming into power, the Government has announced a review of PFI, introduced a Bill to clarify the position of NHS trusts and PFI, and abolished universal PFI testing.
The review, to be carried out by private sector businessman Malcolm Bates, chair of Pearl Group, is due to be completed on 13 June.
James Ballingall, partner and head of the PFI unit at Theodore Goddard, said: “To see the new Government acting quickly and decisively on PFI is welcome and reassuring. People are going full steam ahead as the indications are that PFI will continue and will be successful.”
Ballingall said people were keen to see both a reduction in costs and a speeding up of the PFI process.
“One to watch out for is the relationship between the new Treasury public and private taskforce and the existing Private Finance panel,” he added.
The chair of the panel, Alastair Ross Goobey, was dismissed a week after the Labour government came into power and has not been replaced.
In its response to the Treasury's proposals, Scottish firm MacRoberts called for the introduction of standard documentation for PFI projects and Treasury guidance on issues which cause difficulty in projects, such as the risk of legislative change and compensation on termination.
It added that the resources of the Private Finance Panel Executive were probably over-stretched and should be strengthened by the recruitment of more high-profile players.
Firms also welcomed the abolition of the requirement to test all public sector capital projects for PFI potential, and a Bill allowing NHS Trusts to enter into externally financed agreements certified by the Secretary of State, which is expected to have an easy passage through Parliament.
Ian Graham, a partner at Trowers & Hamlins who deals with PFI and health sector work, said: “The banks may respond to the Bill by freeing up the finance needed to put health service PFI back on track.”