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COMMENT-THE TUBE PLANS ARE A WARNING NOT A DISASTER

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There are many public/private partnerships, but none so high profile as the government's proposals for the Tube. ...
There are many public/private partnerships, but none so high profile as the government's proposals for the Tube.

Even the man charged with 'thinking the unthinkable' has criticised the government's handling of the plans.

Institute for Public Policy Research director Matthew Taylor said he is concerned about the division of contracts, referring to it as a 'disaster for accountability'.

A report by Deloitte & Touche has finally been forced into the open following a High Court judgment.

The report states unequivocally that the government's plan does not provide value for money.

It says public bond financing has been ignored as an option when it would mean savings of hundreds of millions of pounds.

Richard Kemp, Lib Dem chair of 4Ps, recently told a Local Government Association finance conference there was too much emphasis on the Tube when it came to debating PPP.

Public/private partnerships are working effectively across a range of services and allow councils to shop around for the best deal. The row between the government and unions is becoming stale and misses the point.

The report from Deloitte & Touche criticises the government's insistence on privatising the Tube, but it does not say all public/private partnerships are doomed.

It does, however, point to several areas which need to be given careful consideration before such partnerships are undertaken.

All bidders must be required to provide firm prices for the lifetime of a contract, but there needs to be enough flexibility to allow for unforeseen circumstances.

Bids from the private and public sector should be judged on a level playing field. The Deloitte & Touche report shows the government calculated the public sector would fail to meet the performance requirements, while assuming the private sector could.

The statistical analysis used in the assessment for privatising the tube is described as arbitrary and misleading.

The early selection of preferred bidders means negotiations have been completed without the benefit of competition.

A decision to choose one bidder over another is 'based on assumptions which are highly subjective', according to the report.

The criticism from Deloitte & Touche does not mean private/public partnerships are wrong, but it should sound a note of caution to councils.

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