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PFI GRANT SUPPORT FACES OVERHAUL

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The government is to overhaul grant support for private finance initiative schemes so the amount councils ...
The government is to overhaul grant support for private finance initiative schemes so the amount councils

receive is more closely linked to what they pay.

New PFI schemes will be supported by an annuity scheme under which they receive government funding at a constant level over the life of the contract, instead of a diminishing amount each year.

Local government minister Nick Raynsford said the new system would create a level playing field between PFI and conventional procurement.

'By eliminating bias in favour of PFI, it will ensure decisions are taken as much as possible on value for money grounds, rather than the level of grant support,' he said.

Keith Beaumont, programme manager at the Local Government Association, said most councils welcomed the introduction of the annuity scheme.

'But it only improves choice if you've got the capital resources to consider other funding routes,' he said. 'If PFI is the only route available, it doesn't.'

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