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CBI WARNING ON PFI

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The private finance initiative is in danger of collapse unless the government takes action, according to the Confed...
The private finance initiative is in danger of collapse unless the government takes action, according to the Confederation of British Industry.

It has produced a series of demands that it says are needed to resuscitate the policy and ensure it meets the targets set last year by the chancellor.

The CBI says the PFI is being misused as an excuse for the government to cut back on capital spending. It believes more public funding is needed to back PFI projects.

'The PFI is a tool, not a panacea. Business is frustrated at the waste of resources and slow progress,' said CBI director-general Adair Turner. The government must not underestimate the scale of effort needed, he warned.

The confederation wants a better project selection process, a redefinition of risk allocation, more refined procurement and more public sector funding to back schemes.

Financial secretary to the Treasury Michael Jack welcomed the report and agreed with its conclusions: 'Industry knows we are working hard to address their criticisms.'

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