John Hutton signed off thirteen NHS Private Finance Initiative (PFI) building projects as a Labour health minister in 2002 (see footnote). Last month he was appointed to speak up for private sector investors ahead of likely disputes as some of the earliest PFI contracts draw to a close.
(Now Lord) John Hutton has been installed as the chair of the Association of Infrastructure Investors in Public-Private Partnerships (AIIP), a body specifically formed to represent the investors’ view.
The private consortia are eager to head off the danger of legal battles over liability for repairs and other costs in the final few years of contracts when the private sector has the least incentive to upgrade equipment or carry out maintenance.
According to the National Audit Office around 70 PFI contracts worth about £4bn are due to come to an end in the next four years, rising to 300 over the next decade. The issue is complex because as the NAO emphasized in a major report in 2020, “the PFI model is designed to be self-monitoring.”
In other words, the private sector itself is left to review performance on contracts and report to the public body concerned, which it does through the company that represents each consortium, known as the ‘Special Purpose Vehicle’.
Full story in The Lowdown, 27 February 2024
