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PFI SLAMMED FOR POOR VALUE BY DELOITTE PARTNER

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A leading accountant has attacked private finance initiative projects, saying many could be wasting hundreds of mil...
A leading accountant has attacked private finance initiative projects, saying many could be wasting hundreds of millions of pounds, reported The Independent on Sunday (Business, p2).

Andy Simmonds, technical partner at Deloitte & Touche, said many PFI contracts were being awarded for 'accounting not financial reasons' and could prove to be 'poorer value for money'.

The criticism comes as Treasury chief secretary Andrew Smith is pushing on with plans for£20bn-worth of PFI contracts in education, health, prisons and road-building over the next three years.

More than£13bn has been spent on PFI projects since the scheme was launched by the Conservatives five years ago.

Mr Simmonds said that Deloitte, in its role as district auditor for local authorities, education authorities and hospital trusts, was increasingly seeing contracts for schools, hospitals and public buildings which could cause financial problems for the public sector.

These deals were being signed because they allowed government bodies to take their liabilities for the deal off their balance sheet, so it would not appear in public debt calculations.

'In reality, what we are seeing is that if the thing is on the balance sheet it is not going to happen,' said Mr Simmonds. 'The authorities could beat up the auditors to get a different accounting treatment or renegotiate the deal to get it off the balance sheet. This could mean poorer value for money.'

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