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TREASURY AND CBI IN PFI 'ALLIANCE FOR PROGRESS'

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Chancellor Kenneth Clarke and Adair Turner of the CBI today forged a new alliance for progress in a public and priv...
Chancellor Kenneth Clarke and Adair Turner of the CBI today forged a new alliance for progress in a public and private sector partnership to drive PFI forward.

Speaking today in London to the Private Finance Panel annual conference, the chancellor made a package of announcements:

-- a new and positive PFI partnership with the CBI

-- a full and positive response to the CBI report on PFI

-- a new set of PFI standard contract terms

-- a further set of PFI guidance on crucial issues, based on real deals

-- a new list of agreed PFI deals totalling over £7,000m

Pressing home the themes of achievement, partnership and constant evolution to speed up value for money PFI dealmaking Mr Clarke said:

'The Private Finance Initiative is a partnership between the public and private sectors. The public sector gets better value services, the private sector get new business opportunities. We are now forging an alliance for progress between the treasury and CBI in the true spirit of that partnership.

'In their recent report, the CBI said that PFI was a valuable and essential procurement tool with the potential to bring significant economic benefits. I couldn't agree more. The battle over the principles has been won. We are now tackling the practicalities.

'The report was a clear-headed examination of the implementation of a major policy. We welcomed the report when it was published. Indeed, on many of the suggestions action was already underway.

'Today, we are publishing a detailed and positve response along with a commitment to a continuing dialogue and an agreement to work together to realise in full the enormous potential for PFI.

'We have listened. We have learned. We are taking action. PFI is a revolution in the provision of public services. It is transforming the public sector from being an owner of assets to a purchaser of services. Today I want to announce the latest stage in our mission to refine the PFI process. After the revolution comes evolution.

'Back in April, we published case studies and Guidelines For Smoothing the Procurement process. Today we are publishing the latest in a series of booklets, based on real deals done, offering PFI practioners specific help and advice:

-- Standard Contract Terms (to save re-inventing the wheel on every contract)

-- Transferring Investments in PFI Projects (advice on transferring investments in and out of projects - fundamental to attracting new investors into PFI)

-- Output Based Specifications (how to specify delivery of an output)

-- EU Procurement Procedures (putting PFI into the context of EU rules)

-- PFI in Government Accommodation

'By the end of the year we will put out guidance on How to Evaluate Bids and Handling Difficult Contract Issues. We intend to go on responding positively to constructive suggestions. As issues arise, more guidance will follow.

'As we focus on practicalities, we must not forget that PFI is already a success. We are today publishing a list showing over £7,000m of deals already agreed. Compare this with just £1,500m this time last year. Seldom a week goes by now without a new deal.

'A modern government should not believe it is a better government just because it owns buildings. What counts is the quality of service. PFI achieves this by focusing the public and private sectors on the areas each does best. The results are there to see. PFI is happening. PFI is delivering better services at better value for money. PFI is here to stay'.

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