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LGMB/DETR SURVEY FINDS PRIVATE FINANCE RELATIONSHIPS 'IN THEIR INFANCY'

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A survey of local authority attitudes to private finance will show that relationships between councils and the priv...
A survey of local authority attitudes to private finance will show that relationships between councils and the private sector are 'in their infancy', and that most councils believe private funders are insufficiently well informed about their requirements.

The Financial Times (p10) reports that the results of the survey, commissioned by the Local Government Management Board and the Department of the Environment, Transport and the Regions, will be announced on Wednesday.

It says: 'Generally, local authorities do not have the knowledge and skills to negotiate private sector funding, and training is required across a spectrum of related topics.'

A parallel British Bankers' Association survey of City attitudes to local government, also to be published at a London conference on Wednesday, is expected to show an equal level of perception problems in financiers' attitudes to councils.

Speakers at the conference will include Hilary Armstrong, the local government minister, who is keen to increase the number of councils involved in private finance initiative deals and to involve the private sector in the government's best value programme.

She will be encouraged by evidence of an overall willingness among local authorities to explore private finance opportunities, the FT reports. However, 95% of councils responding to the survey felt they required greater understanding of PFI, with 92% needing to improve their knowledge of the private finance market generally.

A disturbing finding is that councils with no experience of negotiating private finance were confident they had the ability to do so, while 'those with experience of the private funding community more readily recognise the limitations of their own in-house skills'.

While local authorities believe private financiers are well-informed on central government policies and PFI, they regard them as far less knowledgeable about local government decision-making processes - 95% of councils said the private sector needed to know more about local political issues.

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