Private Finance Initiative lawyers are predicting a boom in work after the Treasury announced plans to treble PFI spending to u12bn.
Nick Maltby, a partner and PFI expert at Pinsent Curtis, says: “New investments will mean more money for advisers so fees are going to be substantially higher.”
Maltby says PFI lawyers were worried a Labour government would cut the amount spent on private enterprises in the public economy. But he says the Treasury's announcement has allayed their fears.
He says: “Lots of law firms are now PFI-based. We were worrying what we would do if PFI work stopped, but that worry has now gone.
“The number of lawyers who just do PFI will increase. [Gordon] Brown's plans are tremendously good news from a legal perspective.”
But although the number of deals will go up, Maltby warns that the Government plans to speed up and cut the expense of each PFI deal, including legal fees. “The Treasury plans to introduce a standard contract for all PFI deals,” he says. “This will cut costs considerably; in the past they were about 10 per cent, but now they will be far less.”
But he concedes that PFI lawyers' overall fees will rise because of the increased total spending by the Treasury.
He also thinks quicker and cheaper PFIs will be more attractive to private investors.
However, Maltby adds that the Government's proposals may have some problems.
“A standard contract may slow down the development of PFI sophistication as a certain amount of the deal will be set in concrete. Battles over terms can lead to cleverer ways of handling PFIs,” he says.