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By Suzanne Simmons-Lewis ...
By Suzanne Simmons-Lewis

Unison are calling for an inquiry into the propriety of arrangements by

the big five accountancy firms involved in more than£54bn worth of PFI projects.

In the wake of the collapse of Arthur Anderson, a new Unison report looks

at the apparent conflict of interest in which the same firm acts as financial

advisor on a public sector project and auditor of at least one consortium

member bidding for the project.

The 'big five' accountancy firms are Pricewaterhouse Coopers, Anderson Worldwide,

KPMG, Ernst and Young and Deloitte Touche Tohmatsu.

The report points out that these firms have been driving government policy

developments on privatisation as secondees to government departments, developing

value for money tests used for PFI projects, and producing key reports which

the government has relied on to defend PFI and PPPs.

According to Unison, public concern is mounting at the potential conflicts

of interest surrounding the different roles taken on by these firms.

Currently, the Greater London Authority is contemplating legal action against

the London Underground PPP because PWC, which evaluated the deal, and Ernst

and Young who did the value for money calculations, are auditors to five

of the eight private bidders set to profit from the contract.

Dave Prentis, Unison general secretary said: 'These companies are running

the government's privatisation agenda and charge massive fees as advisors

and auditors. There must be a huge question mark over the independence and

impartiality of the advice these firms are giving in PFI and PPP.'

He added: 'You need look no further than Arthur Anderson to see the dangers

if an accounting firm acting as both auditors and management consultants.'

The report concludes: 'There is an urgent need for an inquiry to establish

the full extent of the problem and to produce remedies that meet the grave

concerns raised in this report.'

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